Negotiations on $30 bn Tanzania LNG project to start on November 8

Tanzanian Energy Minister January Makamba has declared that negotiations would officially start on November 8 to get the Tanzania LNG project off the ground.

This notably follows a meeting today in Dar es Salaam with Paul McCafferty, Equinor’s Vice President Exploration & Production International – Africa.

On October 4th, Tanzanian President Samia Suhulu Hassan and Minister Makamba had also held a similar meeting, virtually, with Shell’s CEO Ben van Beurden.

The development of the $30bn Tanzania LNG project in Lindi, in southern Tanzania, has been on the table for several years but talks had been suspended since the end of 2019. Last January, Equinor had even decided to write down the value of the project by $982 million, saying that its current economics did not justify keeping it on the balance sheet.

But things changed when President John Magufuli died in March and his Vice President Samia Hassan took over the country’s top job. She made a direct mention of the project during her inauguration speech, giving clear signals of her intention to revive it.

Since then, the Government of Tanzania has had several talks and discussions with Equinor and Shell in order to address pending issues and pave the way for the project’s development.

Tanzania LNG would monetise almost 50 trillion cubic feet of gas (Tcf) discovered in offshore blocks 1, 2 and 4.

Block 2 is operated by Equinor (65%) along with its partner ExxonMobil (35%) while the national oil company TPDC has the right to participate with a 10% interest. The partners have drilled a total of 15 exploration wells since 2011, resulting in nine discoveries with an estimated volume of over 20 Tcf.

On the other side, Blocks 1 and 4 are operated by Shell (60%) along with Singaporean partner Pavilion Energy (20%) and Indonesian partner Medco Energi (20%).

The base case development plan envisages a two-train onshore facility with a combined capacity of 10 million tonnes per annum (mtpa). On the Tanzanian side, hopes are that construction could start by mid-2023 for a commissioning by June 2028.

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Hawilti releases Nigeria LPG Watch Q3 2021

Hawilti has released today its Nigeria LPG Watch for Q3 2021. The report brings you the latest on market trends currently affecting Nigeria’s liquefied petroleum gas value-chain, from supply disruptions to prices fluctuations. After a record LPG supply into Nigeria in Q2 this year, Q3 witnessed more moderate deliveries as global supply chain disruptions affect imports and rapidly evolving prices make it challenging to operate business as usual.  Record high global gas prices coupled with Nigeria’s currency crisis have notably sent LPG cylinder prices up the roof, potentially affecting demand growth in the short term.  QoQ LPG supply into Nigeria was down -4.87% in Q3 with almost 266,000 tonnes discharged at Nigerian jetties. Domestic supply continues to grow and recorded its highest volumes on record, with over 144,000 tonnes of LPG sourced domestically in Q3. Both Q2 and Q3 saw higher domestic supplies than imports, confirming the growth of Nigeria’s local LPG supply.  The full report is available in the “Research” section within your Hawilti+ research terminal.

TechnipFMC sees $3bn of subsea opportunities in Africa within 24 months

TechnipFMC sees subsea opportunities across Nigeria and Angola totaling between $3bn and $5bn within the next 24 months, the company said during its Q3 2021 earnings conference call. This remains in line with its previous estimate released at the end of Q2. Angola to the front The subsea market in the region will be heavily driven by TotalEnergies’ projects in Angola. These notably include the development of the Begonia (Block 17/06) and Cameia (Block 21) fields, with subsea projects values of at least $250m for both. Block 21 is notably the location of one of TotalEnergies’ future production hubs with the pre-FEED for a new floating, production, storage and offloading (FPSO) unit awarded to Yinson earlier this year. Future subsea projects by TotalEnergies in Angola also include the execution of two subsea tieback projects on producing blocks: Cravo, Lirio, Orquidea and Violeta (CLOV) Phase 3 on Block 17 and the ACCE project on Block 31 (an acronym for the Alho, Cominhos and Cominhos East fields). The latter is expected to be the biggest of the pack, with a value of $500m to $1bn. Block 17 has been subject to significant subsea activity recently, with the commissioning of Zinia 2 earlier this year and the ongoing execution of Dalia 3 and CLOV 2. Hawilti’s own research sourced from the Hawilti+ research terminal further shows that Angola will be remaining sub-Saharan Africa’s biggest subsea market in the medium-term. In July 2021, Italian major Eni notably requested expressions of interest for the Agogo full field development on Block 15/06, including the provision of an FPSO system. “Several new production hubs are in the making offshore Angola while producing blocks have received a series of incentives to develop marginal and satellite fields,” said Mickael Vogel, Head of Research at Hawilti. “Infrastructure-led exploration has also proven a very successful strategy in the country and is expected to continue, especially in Block 15/06 and Block 17.” A possible recovery in Nigeria Meanwhile, TechnipFMC sees two projects moving forward in Nigeria that could support the subsea market in the country. One is the development of the Preowei field on OML 130, operated by TotalEnergies and whose field development plan has been approved since 2019. The other one is further development of the Shell-operated Bonga asset on OML 118. In May 2021, new agreements were executed for OML 118 between the NNPC and contractor parties SNEPCo (Shell), ExxonMobil, Total and NAOC (Eni). However, a big question at the moment remains what future Bonga development project will be approved first: Bonga North or Bonga South-West/Aparo. Full details on ongoing and future projects offshore Angola and Nigeria are available in the “Projects” section within your Hawilti+ research terminal.