Nigeria’s pioneer CNG player taps debt capital markets for expansion

This article first appeared on the Hawilti+ terminal on 19 July 2023.

Nigerian natural gas supply company Green Liquified Natural Gas Limited (GLNG) has secured its first debt funding as it looks to boost its operations in Africa’s biggest economy.

The company sold NGN5 billion ($6.5m) of 10-year series bonds due 2033 under its NGN50 billion ($65m) Debt Issuance Programme. Nigerian financial guarantor InfraCredit provided guarantee for the facility.  

The bond proceeds will enable GLNG to develop its Liquified Natural Gas plant and expand its CNG distribution and power-as-a-service capabilities, according to an official statement, noting the bond issue was oversubscribed by 108% by ten institutional investors.

“This maiden bond transaction is an important milestone for GLNG, as it provides the leverage to finance our ambitious plan to establish a state-of-the-art LNG plant in Nigeria,” Chairman of GLNG, Olajide Rosiji, said in the statement.

“More importantly, the success of this transaction reinforces our steadfast commitment to contribute to Nigeria’s clean energy and transportation landscape and foster sustainable economic growth in the region.

GLNG already operates two gas compression and distribution facilities in Ogun State with combined capacity of approximately 10.5 MMscf/d, making it the largest in Nigeria. The company currently delivers an average of 4.2 MMscm of CNG per month to industrial and Autogas customers in southwest Nigeria where access to piped gas infrastructure has been lacking.

Nigeria, Africa’s biggest oil producer, holds some of the world’s biggest gas reserves. But while the country’s gas has benefited industrialization and power generation overseas through LNG exports, its domestic utilization remains limited. Boosting local consumption is now at the centre of the government’s agenda as it promotes gas as a transition and cleaner fuel.

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Saipem’s Scarabeo 5 drilling rig to be converted into new floating unit for Congo LNG

This article first appeared on the Hawilti+ terminal on 10 August 2023. Saipem has been awarded a contract by Eni Congo to convert its Scarabeo 5 semisubmersible drilling unit into a separation and boosting plant. The converted rig will serve a floating production unit (FPU) for Congo LNG, Eni’s LNG export project currently under-development offshore Pointe Noire. Saipem is already a contractor on the project, for which it is executing preliminary engineering and procurement activities. The FPU will be receiving the production fluids from wellheads riser platforms, separate the gas from liquids and boosts the gas to feed the nearby 2.4 mtpa floating LNG unit (FLNG) currently being built by Wison Heavy Industry in China. While start-up is expected in Q4 2025, Eni Congo is expected to start delivering LNG as early as the end of the year from an initial development that relies on a small 0.6 mtpa FLNG unit.

Côte d’Ivoire steps up efforts to secure more gas supplies

Côte d’Ivoire has become home to one of Africa’s most resilient energy sector thanks to its gas and hydropower potential, whose development has provided baseload and reliable power for decades. The west African country currently relies on gas supplied by domestic fields for almost 70% of its electricity production. A little over a decade ago, access to electricity in Côte d’Ivoire stood at only 34%. Today, that rate has grown to close to 70%. But with offshore fields maturing and new gas turbines nearing commissioning, the country needs to find more gas to keep power stations working for the foreseeable future and secure electricity supply for end users. “Securing gas supply to keep the lights on in the future has become a serious concern for local authorities,” one executive told Hawilti during a working visit to Abidjan earlier this year. Gas-to-Power Capacity on the Rise Last year, the country added 180MW of gas-fired power generation capacity to its electricity grid after it expanded the Azito plant. At an official ceremony announcing the expansion of the plant, Côte d’Ivoire’s Minister of Mines, Petroleum and Energy Mamadou Sangafowa Coulibaly said the country aims to increase power generation capacity from its current 2,369MW to 4,000MW by 2025. To bring the country closer to that target, a new gas powered thermal-plant is under construction, with a capacity of 390MW. The Atinkou plant ties into government’s efforts to meet increasing local demand as well as exports to neighbouring countries. The Atinkou Gas Power Project is also designed to displace inefficient and old thermal plants. According to the Africa Development Bank, a development partner on the project, the new power plant, when completed, will be the most efficient gas power plant in Côte d’Ivoire and the West Africa region. Short-term options to boost domestic gas demand To secure more gas, Côte d’Ivoire is focused on maximizing production from existing fields, developing discovered marginal gas fields, and monetizing associated gas from large and upcoming offshore oil projects. Most of Côte d’Ivoire’s gas supplies come from CI-27, a license operated by Foxtrot International where production started in 1999. To increase output, the independent completed a 5-well drilling campaign in 2022. The country’s national oil company (NOC) PETROCI is also being put to the task. Earlier this month, it signed the production sharing contracts (PSC) for blocks CI-523 and CI-525, two licenses that hold the Ibex, Gnou, Kudu and Eland gas fields. When developed, these reserves could provide a steady domestic supply of 60 MMscf/d of natural gas over 16 years. First gas is expected in 2026. Eni’s newly discovered reserves at Baleine on Blocks CI-101 and CI-802 have also brought about some respite. The Italian major has found some 2.5 billion barrels of oil and 3.3 Tcf of gas, providing an opportunity for more domestic supplies. On August 2nd, it signed a gas supply agreement with Côte d’Ivoire to ensure that, as it develops oil reserves for the export market, gas is also reserved to meet local demand. “The signing of this gas sale and purchase contract is a breath of fresh air,” declared Côte d’Ivoire Energies (CI-ENERGIES) Noumory Sidibe during the signing ceremony. What’s next? To grow its gas sector, Côte d’Ivoire is hoping that exploration will yield additional discoveries. In early 2024, Foxtrot International will notably be conducting exploratory drilling on Block CI-12 with the Topaz Driller rig contracted from Vantage Drilling, in hopes to find more gas. But given growing gas demand, Côte d’Ivoire is also considering several import options, including pipeline and LNG. Discussions have been held with Ghana regarding a possible pipeline from its Western region, which houses most of Ghana’s gas receiving and processing infrastructure. Another option could come from the Nigeria-Morocco Gas Pipeline, whose route will cross Côte d’Ivoire. In June 2023, PETROCI was one of the companies that signed a memorandum of understanding (MoU) with Nigeria’s NNPC and Morocco’s ONHYM to reaffirm its commitment to the project.