Ghana: Gov’t To Abolish Take Or Pay Policy In The Energy Sector In August.
Ghana’s Minister for Finance Ken Ofori-Atta has hinted that, government will from August this year do away with take or pay policy in the energy sector which is crippling the sector financially.
The Minister, described the country’s energy sector as being in a ‘state of emergency’ due to some take or pay power contracts the Mahama administration signed with some independent power producers. Therefore, government is set to abolish this policy.
Presenting the mid-year budget statement in Parliament Monday, July 29, 2019 Mr. Ofori-Atta noted that, Ghana is paying so much for unused power and it’s worrying.
“Currently, according to the Energy Commission, our installed capacity of 5,083 MW is almost double our peak demand of around 2,700 MW. Notably, 2,300 MW of the installed capacity has been contracted on a take-or-pay basis. This means that we are contractually obliged to throw away money for this excess capacity which we do not consume.
This has resulted in us paying over half a billion U.S. dollars or over GHS 2.5 billion annually for power generation capacity that we do not need.
“We shall from August 1st 2019, with the support of Parliament, make Take or-pay contracts a beast of the past,” he stated.
The Finance Minister also added that, for gas, Ghana has contracted for around 750 mmscf per day by2023. This is even after this government terminated two other LNG contracts in 2017.
“Current demand is around 250 mmscf per day, and this is projected to rise to between 450 and 550 mmscf per day by 2023. About 640 mmscf of the contracted gas supply is on a take-or-pay basis, meaning we have to pay whether we use it or not. From 2020, if nothing is done, we will be facing annual excess gas capacity charges of between US$550 and US$850 million every year. Thankfully, we have a plan to deal with this,” he said.
Ghana: Minister Blames High Electricity Tariffs On Wasteful Expenditure In Energy Sector
Ghana’s Finance Minister, Ken Ofori Atta has attributed the high cost of electricity tariffs in the country to the wasteful expenditure in the energy sector.
According to him, the situation is making Ghana uncompetitive for manufacturing, thus holding back our industrialization and job-creation agenda.
Presenting the 2019 mid-year budget review in Parliament, Ken Ofori Atta said “Mr. Speaker, the total costs in the energy sector that Government had to cover in 2018 amounted to US$520 million (GH¢2.7 billion).
Moreover, by end of June this year, Government had made total payments of US$604 million (GH¢3.14 billion), and if we do not urgently address the problems in the sector, the projected Government payments in 2019 will be at least US$1billion, (GH¢5.2 billion).
“Our top technical experts, assisted by counterparts from the World Bank, have subjected the energy sector to a thorough analysis and produced the Energy Sector Reform Programme (ESRP), which identifies the key issues in the sector and proposes solutions. According to the ESRP, which has been approved by Cabinet, if we continue with business as usual in the energy sector, the costs to Government will increase over time to an accumulated total of over US$12.5 billion by 2023. .”
The Finance Minister stated that “these wasteful expenditures in the energy sector are one of the main causes of increases in end-user electricity tariffs, imposing hardships on Ghanaians. Similarly, this makes Ghana uncompetitive for manufacturing, thus holding back our industrialization and job-creation agenda. What’s more, these wasteful payments are putting pressure on our foreign currency reserves and on the exchange rate.”
Total Will Develop The LNG Market In Benin
Total, the Republic of Benin and the Société Béninoise d’Energie Electrique (SBEE) have signed the Gas Supply Agreement and the Host Government Agreement for the development of a Liquefied Natural Gas (LNG) import floating terminal and the supply of up to 0.5 million tonnes per annum (Mtpa) of regasified LNG from Total’s global portfolio to Benin for 15 years, starting in 2021.
Total will develop and operate the regasification infrastructure that will comprise a floating storage and re-gasification unit (FSRU) located offshore Benin and an offshore pipeline connexion to the existing and planned power plants in Maria Gléta.
“This project is in line with Total’s strategy to develop new gas markets by unlocking access to LNG for fast-growing economies. We are very pleased to have been entrusted by the Benin authorities to develop LNG imports and support a broad adoption of natural gas in the country,” Laurent Vivier, Senior Vice President Gas at Total said.
“Access to LNG will help Benin to meet growing domestic energy demand and add more natural gas to the country’s current energy mix, hence reducing its carbon intensity”.
The Minister of Energy of Benin, Mr Dona Jean-Claude Houssou, stated, “I congratulate the Total Group on its willingness to support the revitalization of the energy sector, which is at the heart of the Government’s Action Plan (PAG), as evidenced by the signing today of the gas import contract. I would like to highlight the Government’s efforts to restore Benin’s energy independence, which is the foundation of the country’s ambitious economic and social development. The new legislative framework fosters the participation of private capital in the energy sector and is manifested in independent thermal, solar and hydroelectric power generation projects. The gas import project will supply plants in Benin, such as the new 127 MW power station at Maria Gléta, with imported liquefied natural gas, on preferential terms and will position Benin, capital of the WAPP (West African Power Pool), as the crossroads for gas and electricity in the sub- region.”
The agreement is subject to conditions precedents.
Qatar Petroleum, Total Partner Up Offshore Guyana
Qatar Petroleum is further expanding its international reach as it has signed a deal with Total for a share of rights in two blocks offshore Guyana.
The Qatari national oil and gas firm will take hold of 40% of Total’s existing 25% participating interest in the Tullow-operated Orinduik block. Tullow Oil owns a 60% participating interest and EcoAtlantic with a 15% interest in the block.
Also under the farm-in deal, Qatar Petroleum will take 40% of Total’s existing 25% participating interest in the neighboring Kanuku block. Repsol is the operator of the Kanuku block with a 37.5% stake, with Tullow Oil holding the remaining 37.5% interest.
Three exploration wells are planned in these blocks this year: two on the Orinduik block, including the Jethro well which is currently being drilled, and one on the Kanuku block.
“We hope that the exploration efforts are successful. I would like to take this opportunity to thank our partners and the government of Guyana for their collaboration in this effort, and we look forward to working together in these blocks,” Saad Sherida Al-Kaabi, QP CEO said.
The Orinduik block sits 120 kilometers offshore Guyana and has a total area of about 1,800 square kilometers, with water depths ranging from 70 to 1,400 meters. The Kanuku block is located 100 km offshore Guyana and has a total area of about 5,200 square kilometers, with water depths ranging from 70 to 800 meters.
Al-Kaabi said: “We are pleased to expand our global exploration footprint into Guyana together with our valuable, long-term partner, Total, in these offshore blocks in this prospective basin.”
Qatar Petroleum is increasing its overseas reach, as the company just last week signed agreements with Eni and Total to acquire a 25 percent stake in three blocks in the frontier areas offshore Kenya.
The company has in the past years acquired rights in the acreage offshore South Africa, Mexico, Morocco, Cyprus, Mozambique, and Oman as well, with partners being Eni, Total, and ExxonMobil.
Source: offshoreenergytoday.com
Tanzania: Energy Minister To Provide Updates On 2022 LNG Plant Construction At Oil & Gas Congress In October
Tanzania’s Minister of Energy, Hon. Dr Medard Kalemani has confirmed his attendance at the Tanzania Oil and Gas Congress in October this year.
A statement copied to energynewsafrica.com, said Hon. Dr Medard Kalemani will give updates on the recently announced plans for a syndicate of oil companies to commence construction of the $30bn LNG project in 2022.
In March, the government stated that it planned to complete negotiations with a group of international oil companies in September to develop the project.
Led by Norwegian energy firm, and Platinum Sponsor of the Congress, Equinor, the group also consists of Royal Dutch Shell, ExxonMobil, Ophir Energy and Pavilion Energy.
These international companies will work closely on the project, alongside the state-run Tanzania Petroleum Development Corporation (TPDC).
In a budget presentation to parliament, the Honourable Minister stated that the project aims conclude in 2028 and will have capacity to produce 10 million tonnes per annum of LNG.
Currently, each individual investor of the project is holding separate talks with the government negotiation team. These talks are expected to be finalized within seven months.
According to the Bank of Tanzania, work on the project will increase annual economic growth, which currently stands at around 7%, by another two percentage points.
Those keen to learn more about the movements in Tanzania’s gas market would find it beneficial to attend the Tanzania Oil & Gas Congress, which brings together key players in Tanzania’s oil and gas value chain.
Delegates at the high-profile event, which takes place in Dar es Salaam on 2 – 3 October 2019, will be the first to hear about Tanzania’s exciting investment opportunities directly from the Minister of Energy, Government representatives, regulators and industry leaders.
Ghana: We’ll Resist Attempts By Government To Increase Fuel Taxes – COPEC
A consumer advocacy group in the Republic of Ghana, Chamber of Petroleum Consumers, has said that it will fiercely resist any attempt by the government to increase fuel taxes in the 2019 Mid-year Budget.
There are speculations that among the key components of the mid-year budget review expected to be presented in parliament on Monday, July 29, 2019 will be an increment in taxes on petroleum products.
But the Executive Secretary for COPEC, Duncan Amoah argued that the general cost of living in the country has increased as a result of high fuel prices, thus an increment in the taxes will only worsen the plight of Ghanaians.
“Any attempt to foist on us any additional increases by way of taxes instead of the rather general expectations of reductions will be fiercely resisted.”
In a press statement ahead of the budget reading, Mr. Duncan Amoah said Ghanaians will not be able to bear that cost of an increment.
“A section of members of Ghana’s Parliament are already pretty certain of a potential hike in the already choking levels of taxation on the petroleum price build-up affecting Ghanaian pockets.”
“General cost of living within the country has been pushed steeply upwards as a result of high fuel prices but little has been done to reduce the taxes although policymakers and the government acknowledges the difficulties people within the country are facing as a result of these super high fuel prices at the pumps.”
COPEC said increasing petroleum taxes will be “easiest route in squeezing additional revenue from an already frustrated petroleum consumer.”
COPEC said although it believes that there is the need to broaden the country’s tax net, it will be insensitive to increase taxes considering the general hardship in the country.
The Chamber urged the government to focus on illegal fuel smuggling activities happening across the country which leads to revenue leakages instead.
“Provisional figures of Revenue lost by the country according to the NPA for last year alone was in excess of $ 200 million whiles our conservative calculations around the same period points to a revenue loss of about GhS 1.6 billion to the State…. These figures are expected to be even higher by close of year 2019 if nothing is done to stop the illegal fuel smuggling within the country,” COPEC said.
Ghana: Resist Any Hike In Cost Of Electricity Or Fuel –MP Urges Ghanaians
A former Deputy Minister of Energy and Petroleum in the Republic of Ghana, John Jinapor, is urging citizens of the West African nation to resist any hike in cost of electricity or petroleum products that may be announced by the country’s Finance Minister during the mid-year budget review.
The former deputy minister, who is currently the Member of Parliament for Yapei Kusawgu, argued that the need for increased revenue is a result of the government’s mismanagement of the energy sector.
According to him, the government plans to either increase specific Energy Sector Levies or convert the specific levy to ad-valorem.
He noted that the government has earned more than GH¢6 billion from the Energy Sector Levies since assuming office and has projected an additional GH¢3.9 billion for the 2019 financial year.
The legislator insists that revenue struggles were self-inflicted and “responsibility should not be shoved off to the already burdened citizens.”
“For instance out of the over GH¢1.3 billion realized from the 2018 Road Fund Levy as captured in the 2018 ESLA (Energy Sector Levy Account) Report, only GH¢685.50 million was released for road-related expenditure while the rest went into other non-road-related activities.”
In addition, Mr. Jinapor complained that the Finance Minister has so far “failed to account for over GH¢250 million from the total collection of GH¢3.1 billion as captured in the 2017 ESLA Revenues Account.”
“I, therefore, wish to serve notice to the government that we will not countenance any attempt to increase the specific levies or change it from specific to ad-valorem or whatever name they may choose to call it.”
“Indeed, the time has come to send a clear and unambiguous signal to President Akufo-Addo and his Government that we shall use whatever legitimate means possible, both in and out of Parliament to resist any attempt to further burden the citizenry with any tax increment,” Mr. Jinapor warned.
Ghana’s Finance Minister Mr Ken Ofori-Atta is expected to present a mid-year budget review in Parliament on Monday, July 29, 2019.
Find below his full statement
Upward tax increment will lead to unbearable hardships for Ghanaians – John Jinapor
Ghanaians must totally reject any further Tax increases from the Akufo-Addo-led NPP Government in the 2019 Mid-year budget review expected to be presented to the nation on Monday, July 29th.
It will be recalled that in the lead up to the 2016 general elections, the NPP under then-candidate Akufo-Addo made a promise to scrap the Energy Sector Levy if voted into power.
Since assuming political office close to three years, not only have the levies remained, but revenues accruing to the fund has been grossly misappropriated and managed in the most abysmal manner.
For instance, out of the over GH¢1.3 billion realised from the 2018 Road Fund Levy as captured in the 2018 ESLA (Energy Sector Levy Account) Report, only GH¢685.50 million was released for road-related expenditure while the rest went into other non-road-related activities.
As if this was not enough, the Minister of Finance, Hon. Ken Ofori-Atta has so far failed to account for over GH¢250 million from the total collection of GH¢3.1 billion as captured in the 2017 ESLA Revenues Account.
From the records, this Government has realised more than GH¢6 billion from the Energy Sector Levies since assuming office and projecting to collect an additional GH¢3.9 billion for the 2019 financial year.
As a result of mismanagement of this levy, the Deputy Minister of Finance Mr. Charles Adu Boahen recently hinted during the debate on ANNUAL REPORT ON THE ENERGY SECTOR LEVIES AND ACCOUNTS FOR THE YEAR 2018 in parliament, the intention of the Akufo-Addo government to do the following:
- Increase the specific ESLA Levies or
- Convert the Specific Levy to Ad-valorem
U.S. Firms Want Nigeria Oil And Gas Sector Reforms Before Investing
Nigeria, Africa’s biggest oil producer, could attract more U.S. investment if the oil and gas sector becomes less opaque and a fuel-price peg is removed, a US official has said.
“Nigeria needs to think strategically about what is going to make it a more attractive destination,” Brent Omdahl, commercial counselor at the U.S. Department of Commerce, said in an interview in Lagos.
“Our investors are willing to compete on fair terms for new investments if there’s a transparent process to try to win new oil opportunities. What is difficult or a disincentive to investors is when deals are done and then the contracts are not honored,” he added.
Controls on energy prices are also constraining investment, according to Omdahl, who is leaving Nigeria this month.
The country’s National Petroleum Company imports most gasoline under a swap program and has capped the pump price at 145 naira ($0.40) per liter – one of the lowest prices worldwide. Yet that system cost the government almost $2 billion in subsidies last year, according to the International Monetary Fund, which has called for the cap to be lifted.
The controls “perpetuate a system where only certain people benefit,” Omdahl said. “Why not open it up and let everybody benefit from it. That is money that can be used in making investments in refineries and all of a sudden you are paying less for imported fuel and your price goes down.”
Omdahl further said that an accumulation of “easy” loans from China risks increasing debt-servicing costs, and warned against missing out on financing opportunities from multilateral development banks with more stringent requirements.
Nigeria has increased borrowing from China in recent years to finance railways, airports and power plants. Loans from China stood at $2.55 billion as of March 31, which is about one-tenth of Nigeria’s external debt stock, according to the country’s debt management office. While Nigeria has a relatively low 19% ratio of debt to gross domestic product, debt servicing takes up about 69% of government earnings, IMF data show.
“Nigeria needs to ask, money isn’t free, somebody has to pay,” Omdahl said. “So you might as well do what is necessary to earn transparent money.”
TGS Releases EIQ TGS Data Loader
TGS, world’s leading seismic company has released EIQ TGS Data Loader, developed in collaboration with EnergyIQ. Now, companies can automatically blend industry leading data with proprietary customer data in an enterprise well master data management platform for advanced analysis and decision making.
The EIQ TGS Loader processes the most up-to-date and complete data by automatically accessing and processing TGS web services.
This data is matched, validated and blended with other proprietary and third-party sources within a PPDM gold compliant data model to create the most trusted version all available data in a single repository. The data is then provided in a 10/12/14 digit format for consumption by enterprise, interpretation, and analytics applications.
Users can schedule the loading of daily, incremental data from TGS Validated Well Header and TGS Well Performance data sources directly to the EnergyIQ TDM database.
Once the data from TGS automatically flows into TDM, it can then be scheduled to be loaded into a user’s preferred GG&E platform, including Petra™, Kingdom™, Geographix®, Openworks®, Petrel™, Aries™, Wellview™, and more.
In addition, blended data can be delivered directly to business intelligence platforms such as Spotfire®, Tableau®, Power BI® and map (GIS) applications, ensuring that businesses have the best data available, in the most effective format for confident and quick decision-making.
Israel To Start Exporting Natural Gas To Egypt In November
Israel has announced plans to export natural gas to Egypt in November, this year with volumes eventually set to reach seven billion cubic metres per year, Israeli Energy Minister Yuval Steinitz told reporters in Cairo.
The supplies will mark the start of a $15 billion export agreement between Israel’s Delek Drilling and U.S.-based partner Noble Energy with an Egyptian counterpart in what Israeli officials called the most significant deal to emerge since the neighbours made peace in 1979.
The deal signed early last year will bring natural gas from Israeli offshore fields Tamar and Leviathan into the Egyptian gas grid.
Testing of the gas pipeline from Israel to Egypt has been completed, Steinitz told reporters on the sidelines of a regional gas forum in Cairo.
Egypt hopes to leverage its strategic location and well-developed infrastructure to become a key international trading and distribution centre for gas.
Steinitz said in January Israeli exports to Egypt were expected to reach 7 billion cubic meters a year over 10 years, and about half the exports were expected to be used for Egypt’s domestic market and half to be liquefied for re-export.
Separately, a plan to develop the Aphrodite gas field in Cyprus will be finalized within the next few weeks, Cypriot energy minister Giorgos Lakkotrypis told reporters in Cairo.
This plan will include extending a gas pipeline to Egypt, he added.
Cyprus expects initial natural gas production from the Aphrodite field will begin between 2024 and 2025.
Cyprus’ Aphrodite was first discovered in 2011, but production has been delayed since, as stakeholders Noble Energy, Israel’s Delek Drilling and Royal Dutch Shell renegotiate a production-sharing agreement with the government.
There have been a flurry of successful exploration efforts in recent years that identified natural gas reserves in the eastern Mediterranean, where gas output has begun to soar.
Eastern Mediterranean countries including Cyprus, Israel, Egypt and Italy have formed a partnership to deliver more natural gas to Europe and transform the region into a major energy hub.
Ghana: Extend Gas To Areas With Mineral Deposits – Akufo-Addo Charges Gas Company
Ghana’s president, His Excellency Nana Akufo-Addo has urged the country’s National Gas Company (Ghana Gas) to ensure that gas transmission is extended to parts of the country with significant mineral deposits.
He said when that was done, it would help develop the country’s mining sector and enhance its transformational agenda through industrialization.
Speaking at the inauguration of an operational building for Ghana Gas at Esiama in the Ellembelle District in the Western Region, the President expressed delight that the company had connected industrial customers operating within the Free Zones enclave in the Sekondi/Takoradi metropolis to gas supply.
Ghana Gas, he noted, was strategically positioned in the West African nation’s development process and promised that its potential would further be harnessed for growth in the sector.
Gas exportation
President Akufo-Addo said efforts were being made to enhance the capacity of Ghana Gas to be able to export gas to neighbouring countries.
He said the Ministry of Energy and its counterpart in Cote d’Ivoire would soon sign an agreement for the supply of gas to Cote d’Ivoire.
The President said such an agreement would not only help in job creation in Ghana but also accelerate its development.
He further stated that Ghana Gas was exploring more areas of expansion, as it was currently working to develop requisite infrastructure for the production of compressed natural gas (CNG) in the country.
The Western Regional Minister, Dr Kwabena Okyere Darko-Mensah, commended Ghana Gas for its interest in the development of the region.
The Chief Executive of Ghana Gas, Dr Ben Asante, reiterated the company’s resolve to focus on harnessing Ghana’s natural gas resource to its full potential.
Source: graphic.com.gh
Ghana Gas, he noted, was strategically positioned in the West African nation’s development process and promised that its potential would further be harnessed for growth in the sector.
Gas exportation
President Akufo-Addo said efforts were being made to enhance the capacity of Ghana Gas to be able to export gas to neighbouring countries.
He said the Ministry of Energy and its counterpart in Cote d’Ivoire would soon sign an agreement for the supply of gas to Cote d’Ivoire.
The President said such an agreement would not only help in job creation in Ghana but also accelerate its development.
He further stated that Ghana Gas was exploring more areas of expansion, as it was currently working to develop requisite infrastructure for the production of compressed natural gas (CNG) in the country.
The Western Regional Minister, Dr Kwabena Okyere Darko-Mensah, commended Ghana Gas for its interest in the development of the region.
The Chief Executive of Ghana Gas, Dr Ben Asante, reiterated the company’s resolve to focus on harnessing Ghana’s natural gas resource to its full potential.
Source: graphic.com.gh Eni Sees Profit Drop In 2Q
Italian oil and gas company, Eni saw its profit drop by 66% in the second quarter 2019 when compared to the same period last year.
Eni reported on Friday that its adjusted operating profit for 2Q 2019 was €2.28 billion, down by 11% q-o-q and adjusted operating profit of €2.56 billion. Excluding the impact of the loss of control over Eni Norge on the 2018 results to allow a-like-for-like comparison, the group adjusted operating profit increased by 9% in the quarter.
Eni’s net profit for 2Q 2019 was €424 million ($472M), down 66% from the company’s profit of €1.25 billion ($1.4B) in 2Q 2018.
In the second quarter of 2019, Eni’s oil and natural gas production averaged 1,825 kboe/d, down by 2% from the second quarter 2018.
Production was affected by the termination of the Intisar production contract in Libya from the third quarter of 2018.
Excluding that event, production performance was robust, leveraging on the ramp-up of the Zohr field and of projects started in 2018, mainly in Libya, Angola and Ghana (with an overall contribution of 218 kboe/d), as well as on growth in Nigeria, Australia and the United Arab Emirates.
These positives were partly offset by planned shutdowns in Kazakhstan and Norway, lower production in Venezuela due to the current situation in the Country and in Indonesia, due to unsteady production volumes reflecting a slowdown in end-markets in Asia, as well as mature fields decline, mainly in Italy.
When it comes to its hydrocarbon production outlook, Eni reaffirmed the target of a production growth rate in the range of 2%-2.5% y-o-y, assuming a Brent price forecast of 62 $/bbl and net of portfolio transactions.
According to the company, the growth will be fueled by continuing production ramp-up at fields started in 2018, particularly the Libyan projects Wafa compression and Bahr Essalam phase 2, by organic growth in Egypt (Zohr ramp-up), Ghana and Angola, as well as the start-up of the Area 1 oil project offshore Mexico, North Berkine in Algeria and the Trestakk project in Norway and the planned start-ups in Egypt and Algeria.
New field start-ups and ramp-ups are projected to add approximately 250 kboe/d. following the bulk of plant maintenance executed in the second quarter, production growth will resume at a faster rate in the third quarter still affected by residual maintenance activity and will further accelerate in the fourth quarter.
Eni revised its capex guidance for 2019 to a slight decrease from the previous guidance of €8 billion at the budget exchange rate of 1€=1.15 USD.
Source:Offshoreenergytoday.com
Job: ECOWAS Requests An Expression Of Interest For Consulting Services
Deadline date: 19 August 2019
The Economic Community of West African States (ECOWAS) is in search of consultancy services for the distribution network component of the ECOWAS Regional Electricity Access Project.
The consultant is expected to be available in the ECOWAS office in Abuja full time.
Further information can be obtained at the address below during office hours Monday to Friday from 9.00am to 5.00pm (GMT + 1) Local Time.
The scope of consultancy services will include:
Preparation
- Thorough stocktaking of existing studies, specifications, designs of the project and ongoing distribution projects in three countries (Mali, Guinea Bissau and The Gambia), prepare detailed design, specifications, drawings and bidding documents using the best engineering practice.
- Conduct site visits and topographic surveys if necessary to validate the MV lines detailed route and angle poles locations and the MV/LV substations sites.
- If necessary, use the land survey information to minimize environmental impacts and avoid resettlement for the final locations of substations and transmission line routes, which may require updates to the ESMP and RAP
- Render technical expertise to the executing agencies during the procurement process for the distribution line (MV and LV) and 33KV/400V substations (on issuing of bid documents, receipt of additional inquires and questions from bidders, analyse and reply to those inquiries and questions in consultation with the executing agencies)
- Assist each executing agency in the contract award process with successful bidders, and including conditions of contract effectiveness and signatures on the contracts.
- Supervision of the implementation of the contracts for the project and establishment of a project Site Organisation for each contract;
- Examination and approval of the contractor’s/suppliers detailed design documents and drawings for compliance with the specifications in accordance with sound engineering practice;
- Supervision of all types of site construction activities and ensure that the works are done in compliance with the contract plans and specifications with regards to both quality and timing;
- Monitoring and supervision to ensure that the contractors fully implement all relevant mitigation measures and procedures specified in the ESMP;
- Monitoring and supervision to ensure that the local consultant (where required) overseeing the implementation of the RAP fully implements all relevant mitigation measures and procedures specified in the RAP;
- Inspecting and witnessing with each executing agency’s representatives the factory acceptance tests (FAT) during the manufacture of major items of equipment and at the manufacturers’ premises;
- Monitor procurement, delivery and management of materials and equipment at field sites;
- Supervise and approve the testing and commissioning of works for the entire scope of works;
- Check and approve the complete set of “As-Built” drawings, and documentation, and hand over formalities to each e works;
- Participate in site progress meetings and prepare minutes that shall be shared between the project executing agency representatives, contractors for review and approval
- Ensure all coordination and harmonisation of all technical differences between the three executing agencies
- Acting for the implementing agencies for all contract notices, instructions, orders, certificates, approvals and all communications under the contract (generally referred to as contract administration) for all contracts and liaison with all contractors, and the Owner’s Engineer of OMVG transmission line such that the various works/contracts be completed within the time set in each construction schedule and ensure the OMVG transmission lines and substations are completed before the completion of the Distribution lines in Guinea Bissau and The Gambia.
- Impartially advise on any dispute or differences that may arise between executing agencies and the contractors, and potentially extend to advising the executing agencies on issues beyond adjudication, which would include assistance related to arbitration or litigation in connection with the contractors.
- In case of change (variation) orders, completion time extension and/or financial claims arising from the contractors, make in-depth assessment and recommendations to the executing agencies based on the day-to-day records and applicable conditions of the contract.
- Establishment of contract billing procedures, verification and certification of all contractor/suppliers billing before submission to executing agency for the issue of authorisation of payment,
- In consultation with the executing agencies, issue completion certificates and final acceptance certificates to the contractor as per the terms and conditions of the contracts,
- Preparation of monthly and quarterly project progress reports as required by the executing agencies, and to address issues identified by other stakeholders.
- Provide on-the-job training and technology transfer to the staffs of the executing agencies in contractor’s design approval, procurement management, project management and supervision of construction works;
- Attend to the regional project technical committee (PTC) and Project Steering Committee (PSC) meetings and present the project status and challenges (when such committees are established);
- Monitor and supervise the implementation of the Occupational Health and Safety Management Plan proposed by the contractors
- Monitor and supervise the implementation of the Environmental and Social Management Plan outlined in the Environmental and Social Impact Assessment Study, make proposals for amendments as deemed necessary by the consultant due to his professional experience and/or evidence of need during project implementation
- Monitor compliance by contractors during construction and commissioning for applicable legal requirements of Mali, Guinea Bissau and The Gambia.
- Prepare and submit the project completion report, that outline, inter-alia, achievements in meeting the objectives and target set out for the implementing agencies under the World Bank’s requirements.
Eyes On Tortue Ahmeyim FLNG Project In Mauritania And Senegal
With its long and illustrious record dating back over half a century, Africa remains one of the world’s largest liquefied natural gas (LNG) exporters. While few have floundered in recent times, new final investment decisions (FIDs) are occurring for major LNG export projects across the continent and the near term should see more LNG projects being developed in Africa.
Cameroun has already joined the list of 20 countries around the world which exports LNG, with the first export taking place in May 2018.
The project is the first-of-a-kind, involving the conversion of the Hilli Episeyo, a 1975-built Moss LNG carrier with a storage capacity of 125,000 cubic meter (m³) into a floating liquefied plant. In Mozambique, Eni’s Coral South floating LNG project achieved FID in 2017 and LNG production is expected to occur by 2022.
Anadarko Petroleum Corporation announced a FID on its onshore LNG plant in June 2018, and is well positioned to complete the project financing process. ExxonMobil is also moving forward with its onshore Rovuma LNG project after obtaining approval from government on its plan of development (PoD), marking another significant step towards a FID in later this year.
Another LNG project that industry players are keeping close eye on after gaining FID for its first phase; is the Greater Tortue Ahmeyim, a cross border project located offshore Senegal and Mauritania. The cross-border development, a first for the two West African nations and Africa’s deepest offshore project at 2,000 meters below the sea’s surface, is on track to deliver first gas in the first half of 2022.
Obstacles
In the past few years, floating LNG (FLNG) projects gained favour in the LNG supply market because they were designed to lower capital investment and quickly monetize the development of gas resources in remote and sensitive offshore or near-shore locations. However, myriad of issues have made it difficult for several proposed projects to fare well; struggling to attract investors, buyers and financing, and sending a wrong signal to prospective projects.
On the global scale for example, a drastic reduction in exploration and development (E&P) over the last few years because of the oil price crash has yielded few significant gas discoveries. The consequences of major cost overruns at FLNG projects, such as Shell’s Prelude and Petronas’ PFLNG have also been felt by management and shareholders alike, casting a shadow over even projects which have taken FIDs, and currently under construction. Furthermore, the upcoming investment story in large capacity projects in the U.S. could see FLNG struggling to obtain partners, buyers and financing, despite establishing itself as a credible development option.
On the domestic front, Nigeria’s 10 million tpy Brass LNG project, and Olokola (OK) LNG project, are typical examples of LNG projects struggling to gain FID. One of the major setback to the development of these projects, is Nigeria’s gas reserves being entirely associated with oil fields, thus requiring extensive processing and infrastructure to produce LNG; adding to the already costly projects. Again, government’s inertia, risky business environment, and unfavorable fiscal agreements have added barriers to making FID in Nigeria. And there is no such good news for Ophir Energy who finally pulled the plug on its Fortuna FLNG project offshore Equatorial Guinea. The project failed to attract funding, given that FLNG is still a new technology, and that the banks were unwilling to back an Ophir-led project as opposed to established oil firms like Eni or BP’s projects.
In spite of these and other challenges, the International Energy Agency (IEA) estimates that Africa could overtake Russia as a global gas supplier by 2040, demonstrating the scale of opportunity should these obstacles be overcome.
The Greater Tortue Ahmeyim Project
Greater Tortue Ahmeyim is an offshore liquefied natural gas (LNG) project based on upstream gas production from the 2km-deep Tortue field which was discovered by Kosmos Energy in 2015 on the maritime border of Mauritania and Senegal.
An agreement between the Mauritanian and Senegalese governments and partners BP, Kosmos Energy, and national oil companies; Societe des Petroles du Senegal (Petrosen), and Societe Mauritanienne des Hydrocarbures (SMHPM) gave birth to the Greater Tortue Ahmeyim LNG project which is planned to provide LNG for global export as well as making gas available for domestic use.
Paa Kwasi Anamua Sakyi, IES Boss
The Greater Tortue project planned in three phases, is expected to produce gas from an ultra-deep-water subsea system and mid-water floating production, storage, and offloading (FPSO) vessel, which will process the gas, removing heavier hydrocarbon components. The gas will then be transferred to an FLNG facility at an innovative nearshore hub located on the maritime boundary.
The FLNG facility is designed to provide circa 2.5 million tonnes of LNG per annum on average, with the total gas resources in the field estimated to be around 20 trillion cubic feet. The initial subsea infrastructure, part of the first phase, connects the first four wells consolidated through production pipelines leading to this FPSO. Phases 2 and 3 will involve the further development of Tortue Ahmeyim field beyond Phase 1 of the development located in the C-8 block off the shore of Mauritania and the Saint-Louis Profond block offshore Senegal.
The two phases is expected to significantly expand capacity to deliver additional gas from an ultra-deep-water subsea system, tied back to mid-water gas processing platforms. The gas will then be transferred to pre-treatment and offshore LNG facilities located at the established Phase 1 hub.
BP holds a majority interest and operatorship among the four partners in the project, while BP Gas Marketing has been selected as the sole buyer for the investor partners’ LNG offtake for Tortue Ahmeyim Phase 1.
Milestones
October 2018: KBR was awarded a front end engineering and design (FEED) by BP for Phase 1 of the field hub/terminal development. The agreement contains a mechanism to allow the transition of the contract to an engineering, procurement and construction management (EPCM) contract at a later date. KBR is expected to provide management of the quarters and utilities (QU) including telecoms systems FEED and provision of supplemental services (system engineering, interface oversight, technology planning, support and verification) of the hub/terminal for the project.
December 2018: Kosmos Energy and its partners announced an agreement on a FID for Phase 1 of the project. The decision was made by Kosmos, BP, Petrosen and SMHPM following a meeting between President Mohamed Ould Abdel Aziz of Mauritania and President Macky Sall of Senegal to agree final elements.
February 2019: Golar LNG Ltd.’s newly incorporated subsidiary, Gimi MS Corporation, signed a 20-year lease and operating agreement (LOA) with BP to provide an FLNG unit on charter basis to service the Greater Tortue Ahmeyim project. The unit is expected to liquefy gas as part of the first phase of the project when it begins production in 2022.
February 2019: Keppel Shipyard Ltd received the final notice to proceed (FNTP) from Gimi MS Corporation to commence full conversion for the Gimi floating LNG (FLNG) project.
The LNG carrier Gimi has since been relocated from layup to Keppel Shipyard in Singapore where conversion works are expected to start soon. The unit’s construction is estimated to cost roughly $1.3 billion, excluding financing costs.
April 2019: BP awarded KBR Inc.’s UK operating subsidiary the Pre-FEED Services contract for Phases 2 and 3 of the project, for the further development of the field beyond Phase 1. The agreement is to design offshore platforms and underwater pipelines to expand natural gas production that will be delivered to pre-treatment and offshore LNG facilities located at the established Phase 1 hub.
April 2019: TechnipFMC was contracted by BP for the development of the FPSO FEED for the LNG project. The contract for the Tortue Ahmeyim field development floating production storage and offloading unit includes a mechanism allowing it to transition into an engineering, procurement, construction and installation (EPCI) deal at a later stage. TechnipFMC is expected to work on defining the technology and equipment scope of the project.
May 2019: Baker Hughes, a GE company (BHGE), was awarded the contract to supply turbomachinery equipment for the first phase of the project, by Golar’s topsides contractor Black & Veatch (B&V) in the first quarter of the year. BHGE will provide the technology for four compressor trains for offshore gas liquefaction on board the LNG carrier Gimi.
July 2019: Kosmos Energy announced that the Greater Tortue Ahmeyim-1 well (GTA-1), drilled on the eastern anticline within the unit development area of Greater Tortue, has encountered approximately 30 meters of net gas pay in high-quality Albian reservoir, confirming the expectation that the gas resource at Greater Tortue Ahmeyim will continue to grow over time and could lead to further expansion of this world-scale project. While significant progress have been made since the Greater Tortue Ahmeyim project achieved FID for Phase 1 towards delivering first gas in the first half of 2022, it remains to be seen when the project’s financing process would be completed, and whether the project would not experience any delays and cost overrun.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security (IES) ©2019
The writer has over 22 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media.
Paa Kwasi Anamua Sakyi, IES Boss
The Greater Tortue project planned in three phases, is expected to produce gas from an ultra-deep-water subsea system and mid-water floating production, storage, and offloading (FPSO) vessel, which will process the gas, removing heavier hydrocarbon components. The gas will then be transferred to an FLNG facility at an innovative nearshore hub located on the maritime boundary.
The FLNG facility is designed to provide circa 2.5 million tonnes of LNG per annum on average, with the total gas resources in the field estimated to be around 20 trillion cubic feet. The initial subsea infrastructure, part of the first phase, connects the first four wells consolidated through production pipelines leading to this FPSO. Phases 2 and 3 will involve the further development of Tortue Ahmeyim field beyond Phase 1 of the development located in the C-8 block off the shore of Mauritania and the Saint-Louis Profond block offshore Senegal.
The two phases is expected to significantly expand capacity to deliver additional gas from an ultra-deep-water subsea system, tied back to mid-water gas processing platforms. The gas will then be transferred to pre-treatment and offshore LNG facilities located at the established Phase 1 hub.
BP holds a majority interest and operatorship among the four partners in the project, while BP Gas Marketing has been selected as the sole buyer for the investor partners’ LNG offtake for Tortue Ahmeyim Phase 1.
Milestones
October 2018: KBR was awarded a front end engineering and design (FEED) by BP for Phase 1 of the field hub/terminal development. The agreement contains a mechanism to allow the transition of the contract to an engineering, procurement and construction management (EPCM) contract at a later date. KBR is expected to provide management of the quarters and utilities (QU) including telecoms systems FEED and provision of supplemental services (system engineering, interface oversight, technology planning, support and verification) of the hub/terminal for the project.
December 2018: Kosmos Energy and its partners announced an agreement on a FID for Phase 1 of the project. The decision was made by Kosmos, BP, Petrosen and SMHPM following a meeting between President Mohamed Ould Abdel Aziz of Mauritania and President Macky Sall of Senegal to agree final elements.
February 2019: Golar LNG Ltd.’s newly incorporated subsidiary, Gimi MS Corporation, signed a 20-year lease and operating agreement (LOA) with BP to provide an FLNG unit on charter basis to service the Greater Tortue Ahmeyim project. The unit is expected to liquefy gas as part of the first phase of the project when it begins production in 2022.
February 2019: Keppel Shipyard Ltd received the final notice to proceed (FNTP) from Gimi MS Corporation to commence full conversion for the Gimi floating LNG (FLNG) project.
The LNG carrier Gimi has since been relocated from layup to Keppel Shipyard in Singapore where conversion works are expected to start soon. The unit’s construction is estimated to cost roughly $1.3 billion, excluding financing costs.
April 2019: BP awarded KBR Inc.’s UK operating subsidiary the Pre-FEED Services contract for Phases 2 and 3 of the project, for the further development of the field beyond Phase 1. The agreement is to design offshore platforms and underwater pipelines to expand natural gas production that will be delivered to pre-treatment and offshore LNG facilities located at the established Phase 1 hub.
April 2019: TechnipFMC was contracted by BP for the development of the FPSO FEED for the LNG project. The contract for the Tortue Ahmeyim field development floating production storage and offloading unit includes a mechanism allowing it to transition into an engineering, procurement, construction and installation (EPCI) deal at a later stage. TechnipFMC is expected to work on defining the technology and equipment scope of the project.
May 2019: Baker Hughes, a GE company (BHGE), was awarded the contract to supply turbomachinery equipment for the first phase of the project, by Golar’s topsides contractor Black & Veatch (B&V) in the first quarter of the year. BHGE will provide the technology for four compressor trains for offshore gas liquefaction on board the LNG carrier Gimi.
July 2019: Kosmos Energy announced that the Greater Tortue Ahmeyim-1 well (GTA-1), drilled on the eastern anticline within the unit development area of Greater Tortue, has encountered approximately 30 meters of net gas pay in high-quality Albian reservoir, confirming the expectation that the gas resource at Greater Tortue Ahmeyim will continue to grow over time and could lead to further expansion of this world-scale project. While significant progress have been made since the Greater Tortue Ahmeyim project achieved FID for Phase 1 towards delivering first gas in the first half of 2022, it remains to be seen when the project’s financing process would be completed, and whether the project would not experience any delays and cost overrun.
Written by Paa Kwasi Anamua Sakyi, Institute for Energy Security (IES) ©2019
The writer has over 22 years of experience in the technical and management areas of Oil and Gas Management, Banking and Finance, and Mechanical Engineering; working in both the Gold Mining and Oil sector. He is currently working as an Oil Trader, Consultant, and Policy Analyst in the global energy sector. He serves as a resource to many global energy research firms, including Argus Media.