Market Report: Funding options for AKK gas project nearly concluded
On Wednesday 19th September, Dr. Maikanti Baru, Group Managing Director of The Nigerian National Petroleum Corporation (NNPC) said that discussions on the funding options for the Ajaokuta-Kaduna-Kano (AKK) gas project are nearly concluded. Dr. Baru revealed that the corporation had gone far in negotiating the terms of funding, as well as the best payback structure for the project, affirming that the financial partners were willing to collaborate with the corporation on the matter. The AKK gas pipeline is designed to enable gas connectivity between the East, West and North, which is currently inadequate. It would also enable gas supply and utilization to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth. Dr. Baru added that Nigeria is focused on expanding its critical gas infrastructure such as pipelines, which would lead to a gas grid covering the entire country.
Aqualis offshore has successfully completed its operations mooring in the Egina floating, production, storage and offloading vessel in Nigerian waters. Total is the operator of the Egina field, which is located off the coast of Nigeria of water depths of more than 1,500m. The floating storage and offloading vessel is about 330m (1,083ft) in length and is expected to have an oil storage capacity of approximately 2.3 MMbbi of oil.
SIERRA LEONE/EQUATORIAL GUINEA/BURKINA FASO
On Monday 17th September, Sierra Leone and Equatorial Guinea governments signed a Memorandum of Understanding (MoU) to cooperate in oil and gas exploration. The MoU allows them to share experiences that will enable Sierra Leone to achieve its dream of becoming a petroleum exporting nation. The agreement entails exchange visits between the two countries. The Director General of the Petroleum Directorate of Sierra Leone, Timothy Kabba, who signed on behalf of his government, hoped their governments will use the oil and gas sector to achieve their development goals. Mr. Kabba said the MoU will allow the oil and gas industry of Sierra Leone to show positive signs and that the country needed help to ensure it realizes its dream. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, represented the Equatorial Guinea government at the signing ceremony in Freetown. He told journalists that it is the wish of the Equatorial Guinean President to establish cooperation between Sierra Leone and Equatorial Guinea, adding, “we do believe that with the experience we have gained in oil & gas, we have a commitment as a brotherly African country to transmit that knowledge and experience to other African countries, the same way that other African countries gave it to us”.
Equatorial Guinea’s Ministry of hydrocarbons has also signed an MoU with the government of Burkina Faso to supply liquid natural gas (LNG) and build critical infrastructure to import, store and transport gas. According to a statement by Equatorial Guinea’s hydrocarbons’ ministry, the initial three-year agreement compels both sides to negotiate and sign an LNG sales and purchase agreement and a terminal use agreement that will be the basis for their first LNG exchange. The MoU also calls for Equatorial Guinea to explore and produce oil and gas in Burkina Faso. Mr. Lima said: “This collaboration with Burkina Faso, part of our LNG 2 Africa initiative, highlights the important responsibility of African countries to cooperate in the energy sector and build the necessary infrastructure to strengthen our economies.” As part of the agreement, both sides will commission a technical study for the construction of regasification and LNG storage terminals and will exchange knowledge and data. They will also work to build regasification and storage terminals in Burkina Faso and transport infrastructure, either by pipeline or LNG carrier.
On Thursday 20th September, crude oil prices settled lower after President Donald Trump demanded OPEC find a way to slash oil prices. The New York Mercantile Exchange crude futures for November delivery fell 32 cents at $70.80 a barrel, while Brent crude futures fell 1.03% to trade at $78.58 a barrel. The U.S. Energy Information Administration weekly report for Wednesday 19th September showed a fall in crude inventories by 2.057 million barrels for the week ending Sept.14, beating expectations for a draw of 2.74 million barrels, while the demand for gasoline in the country rose.
OPEC and non-OPEC members led by Russia are set to meet on Sunday 23rd in Algeria to discuss how to share supply increases to offset the loss of Iranian supply, however, no immediate action was planned although pressure is mounting to prevent a spike in oil prices ahead of new U.S. sanctions on Iran. Saudi Arabia said on Tuesday 18th September the country is comfortable with oil prices above $80, signalling that the largest oil maker might not increase output to send the price lower.