Market Report: BP Awards FEED for Tortue/Ahmeyim LNG
On Monday 16th April, Dr. Maikanti Baru, the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) while being awarded the 2017 Zik Prize for Professional Leadership by the Public Policy Research and Analysis Centre (PPRAC), disclosed that funding remained a major constraint to the NNPC. Baru, who was being celebrated for his accomplishments and the good work he is doing in the NNPC, noted that the management shall not allow itself to be derailed in its quest to set NNPC on the path of growth and productivity. Baru also observed that over the last few months, NNPC had devised many means of funding its projects, with several of them yielding positive results. Baru was also honoured with a Distinguished Service Award by the Ahmadu Bello University, ABU, Alumni Association.
Oando Plc has been awarded a contract by the NNPC for the construction of a 40inch x 614km Ajaokuta-Kaduna-Kano (AKK) gas pipeline. The infrastructure will include facilities such as Metering/Terminal Gas Station, Pigging Station, Block Valve Stations etc. Following the recent successful execution of contract agreements for the engineering, procurement, construction, commissioning and financing for Lots 1&3 of the circa $2.8billion trans-Nigeria gas pipeline project, NNPC announced that measures have been activated for the flag-off of what has been described as the single biggest gas pipeline project in the history of oil & gas operations in Nigeria. The development of the AKK grid is a manifestation of the Gas Infrastructure Blueprint in the Nigerian Gas Master Plan, which seeks to extend the existing gas transmission network and achieve connectivity between the East (gas reserves) and the North (demand centres) serving new customers in the Northern regions and bridging the shortfall in the Western region.
BP has awarded a Front-End Engineering Design (FEED) contract to global oilfield services company, TechnipFMC for the Tortue/Ahmeyim Liquefied Natural Gas (LNG) project, located offshore on the border between Mauritania and Senegal. Under the terms of the contract, TechnipFMC will provide engineering, procurement, construction and installation services to develop Floating Production Storage and Offloading (FPSO) units for the Tortue/Ahmeyim gas field. TechnipFMC will work on defining the technology and equipment scope and bringing expertise to deliver major projects, leveraging extensive experience with Chinese fabrication. The BP-operated Tortue/Ahmeyim gas project upon completion is expected to export LNG to global markets, as well as supply gas to Senegal, Mauritania and other African nations. The Tortue/Ahmeyim field development is located in the C-8 block offshore Mauritania and the Saint-Louis Profond block offshore Senegal. Speaking on the gas project in Africa, Nello Uccelletti, the president of TechnipFMC’s Onshore and Offshore business stated, “We are very honoured to be awarded this contract in West Africa which further demonstrates our leading position in offshore gas monetization. We look forward to collaborating with BP to unlock the full potential of this important project.”
On Thursday 19th April, oil prices rose to their highest level in over three years as U.S. inventories fell and Saudi Arabia pushed for higher prices by continuing to withhold supplies. The US West Texas Intermediate futures rose to $69.06 a barrel by 5:05 AM ET (9:05 GMT), while the ICE Futures Exchange in London Brent was up at $74.19 a barrel. The U.S Energy Information Administration (EIA) weekly report for Wednesday 18th April showed a fall in crude oil inventories by 1.071 million barrels in the week ending April 13, confounding expectations for a crude-stock decline of 500,000 barrels. The EIA report on the crude stock decline is welcoming news to investors who fear a rise in U.S. shale would offset efforts by the
Organization of the Petroleum Exporting Countries (OPEC) and Russia to curb production and end a global supply glut. The OPEC deal to cut crude output by 1.8 million bpd to boost oil prices began in January 2017 and is set to expire at the end of 2018. However, Saudi Arabia’s de-facto leader is pushing for the cuts to extend into 2019. The group is scheduled to meet on Friday 20th April for discussions.