“We are still in operations!”, says Nigeria LNG

Nigeria LNG, Africa’s biggest LNG exporter, has clarified that its terminal on Bonny Island in the Niger Delta is still operating despite a force majeure issued by the company earlier this week.

“The company’s plant is in operation though at limited capacity due to reduced gas supply from some of its upstream suppliers,” Nigeria LNG has declared today.

The declaration of force majeure by NLNG had raised several concerns on gas supplies in and out of Nigeria. The company is Africa’s largest LNG exporter and the gas it exports represents on average 10% of Nigeria’s export revenues. It is also the biggest domestic supplier of cooking gas, a commodity that already suffers from soaring inflation.

The company had earlier revealed that all its upstream gas suppliers had declared force majeure following their inability to produce gas due to ravaging floods that have already displaced millions in the Niger Delta. The shut-in of gas production has caused significant disruption of gas supply to Nigeria LNG, forcing the LNG exporter to operated at limited capacity.

Nigeria LNG operates six LNG trains on Bonny Island with a capacity of 22.5 million tonnes per annum (mtpa). Most of Nigeria’s LNG is exported to Europe and Asia, with key European markets such as France, Spain, and Portugal amongst its largest buyers.

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Shell maintains pre-FID options worth 405,000 bpd offshore Nigeria

Shell still has four major pre-FID options to develop its reserves offshore Nigeria, according to the major’s latest quarterly presentation. These represents the biggest share of the company’s pre-FID options across its global upstream portfolio. Most projects are concentrated on and around the Bonga deep-water field on OML 118, where the production sharing contract (PSC) was renewed in May 2021. Shell continues to consider three major projects on the block, including brownfield projects like Bonga North Tranche 1 (120,000 boepd at peak) and Bonga Main Life Extension & Upgrade (60,000 boepd at peak). It also has the option of developing Bonga Southwest, which would rely on a new FPSO and a unitization with the Aparo field, for a peak production of 150,000 boepd. The two brownfield projects are likely to be prioritized given their lower development costs. In May 2022, Shell notably started the tendering process for the Bonga North subsea tie-back project. The pre-qualification documents included three different packages:  the topsides modification of the Bonga FPSO (design engineering, procurement, transportation, fabrication, offshore installation and commissioning); the engineering, procurement and construction of flowlines, risers, umbilicals, and installation works; and the design, manufacture, and supply of subsea equipment and provision of healthcare support. The major also continues to make progress towards the development of the shallow-water HI gas field, in partnership with Nigerian independent Sunlink Petroleum. While the development concept has not been officially confirmed, the field is expected to be a key supplier of gas to Nigeria LNG’s upcoming Train 7.   Details on deep-water activity in Nigeria are available within your Hawilti+ research terminal.

Somalia: Federal Government approves Coastline Exploration’s Production Sharing Agreements

Coastline Exploration has announced receipt of final authorization to proceed with its exploration programme in Somalia after paying a $7m signature bonus to the Somali Central Bank. The oil & gas independent had announced last February that it had signed seven Production Sharing Agreements (PSAs) for deep-water blocks offshore Somalia. “We want the first exploration well to start as soon as possible,” Somali President Hassan Sheikh Mohamud said in a statement. Based out of Houston, Coastline Exploration says it has invested over $50m in Somalia and has been engaged since 2018 on negotiating its offshore PSAs.