Projects reaching FID in 2019
With new production cuts set by the Organization of the Petroleum Exporting Countries and its non-member allies in December, the oil prices have once again stabilized, and key megaprojects — many of which were delayed after the drastic drop in oil prices in 2014 — are expected to reach FID in 2019.
The OPEC and non-OPEC countries are targeting stable, though not necessarily high, oil prices through the deal, which the organization is hoping will be enough to drive investment in the global energy sector.
Project development in 2019 is heavily dominated by LNG on the African continent. In fact, Wood Mackenzie is predicting 2019 will be a “record” year for LNG globally.
“After a dearth of new greenfield LNG project sanctions in recent years, suppliers are now positioning to grow,” the report said.
Tortue LNG — Senegal and Mauritania
Expected to be the first major project to get off the ground in Senegal and Mauritania’s MSGBC Basin, Texas-based Kosmos Energy and UK-based BP have said FID is just around the corner, slated for December 2018 or early 2019.
Kosmos and BP are targeting first gas from Tortue field by 2022, after reaching a milestone in early 2018, when Mauritania and Senegal agreed to split the revenue and production generated from the field, which straddles Senegal and Mauritania’s maritime border. The Greater Tortue Complex has an estimated 25 trillion cubic feet of gas in reserves.
In an announcement in October, FEED for phase 1 of the project was mostly complete, the Unit Development Plan was submitted to both the Senegal and Mauritania governments, according to Kosmos.
“The next key step is for the governments to grant the Exclusive Exploitation Authorization which would enable FID. In parallel, the partnership is progressing the LNG offtake agreement,” the report stated.
SNE Field Development — Senegal
Cairn Energy and Woodside Energy’s much anticipated SNE project is expected to reach FID in early 2019, with the companies submitting the Development and Exploitation Plan to the Ministry for approval in October 2018.
The plan, which around the end of 2018, includes Woodside Energy exercising its option to become the operator of the field; and calls for several development phases to capture an estimated 500 million barrels of oil. First oil is targeted for 2022. The companies have also submitted the Environmental and Social Impact Assessment study and received tender responses for the FPSO facility and subsea infrastructure.
Cairn owns a 40 percent stake in the development, with partners Woodside (35 percent), FAR Ltd (15 percent) and Petrosen (10 percent).
Mozambique LNG — Mozambique
Mozambique’s LNG projects are proving to be some of the most competitive in the world, with the country’s Coral FLNG project one of the only mega projects able to reach FID in 2017 globally amidst an uncertain pricing environment. As stability increases, the country’s onshore LNG project, headed by US-based Anadarko, is also headed for FID in the first half of 2019.
Anadarko Executive Vice President told reporters earlier in 2018 that the company had managed to reduce the cost of the project by about $4 billion, making the cost about $600 per tonne; the company also signed Heads of Agreements with Tokyo Gas Co Ltd and Centrica Plc. In November, Anadarko re-confirmed it was on track for FID in 2019 and committed to spending $200 million in pre-FID work on the site. The company awarded the contract for engineering, procurement, construction and installation of the offshore subsea system to a consortium made up of TechnipFMC and VanOord.
Ingram has said next steps include converting the sales agreements into binding agreements and bringing in financing.
“At 2.6 MTPA, this HOA represents a significant portion of the marketing off-take target we have set for FID, and it further reinforces our previous updates on the project, which have stated our focus now is on converting these non-binding commitments into fully termed Sale and Purchase Agreements,” Ingram said in a press release earlier this year.
The project is slated for two LNG trains and a total capacity of 12.88 MTPA, supplied from the Golfinho/Atum fields in Offshore Area 1.
Assa North, Ohaji South (ANOH) Gas Fields — Nigeria
Nigeria-based Seplat initially predicted reaching FID by the end of 2018 on the Assa North, Ohaji South gas fields project, especially after it was named one of Nigeria’s seven critical gas development projects. Agreements were signed with the Nigerian National Petroleum Corporation in August 2018 to fast track the development of the fields
The ANOH gas fields are projected to produce 3.4 billion standard cubic feet of gas per day by 2020, which will be fed into the a processing plant owned by the ANOH Gas Processing Company.
Lake Albert Development Project — Uganda
The partners of the Lake Albert Development Project in Uganda — which has been on hold for several years — are aiming to reach FID in the first half of 2019, according to Tullow Oil’s November trading statement. In the statement, Tullow said the technical work is “well advanced.”
Tullow Oil initially made discoveries in Lake Albert in 2006, and the project was deemed commercial in 2009, with an estimated 1.7 billion barrels of oil. In the development plan, which was approved by the Ugandan Government in August 2016, the partners — Tullow Oil, Total and CNOC — will produce around 230,000 barrels of oil per day.
A key hold up on the project has been the lack of a pipeline infrastructure to link landlocked Uganda with a port to export the crude. Also announced in November, however, Stanbic Bank Uganda said it expects the $2.5 billion East Africa Crude Oil Pipeline to reach FID in June 2019.