Anadarko Petroleum approved a $25-billion liquefied natural gas (LNG) project in Mozambique that could help transform the economy of one of the world’s poorest countries.

CEO Al Walker signed off on what he called the biggest ever foreign investment in Africa. Anadarko sees potential for Mozambique to become one of the largest LNG suppliers in the world, and the project – expected to export the fuel to countries in Asia and Europe – will play a big part. It will be funded with $11-billion of equity and $14-billion of debt.

“Over time this project will double this country’s GDP,” Walker said at the signing ceremony in Maputo with Mozambique President Filipe Nyusi.

It’s taken the American company almost a decade to green-light the development after discovering gas in Mozambican waters in 2010. The country had to draft new regulations for its nascent oil and gas industry, even as uncertain global demand for LNG slowed plans. The government expects $95-billion of revenue over 25 years from this project and others led by Exxon Mobil and Eni.

“It is the start of a new era for Mozambique,” said Darias Jonker, a London-based director at consultants Eurasia Group. The size of these projects “will bring tens of billions of dollars of investment” and revenue to the government, he said.

Developing the hydrocarbon resources is crucial for the southern African nation, which has struggled to service its debt in the past. Nyusi could use Anadarko’s planned investment in the project, called Mozambique LNG, to showcase his achievements ahead of elections in October, and hope to compensate for problems with borrowings, according to Jonker.

Mozambique LNG is at the center of a new restructuring deal the government reached with a core group of Eurobond holders last month. While investors will no longer have access to future revenue from the project, the in-principle agreement allows the administration to pay a lower interest rate until after the country’s gas production begins in 2023

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Bulk liquid storage operator Bidvest Tank Terminals’ (BTT’s) R1-billion mounded liquefied petroleum gas (LPG) storage facility in Richards Bay, KwaZulu-Natal, is set to house the largest tanks in the world and is expected to greatly enhance LPG supply in Southern Africa once completed, the company has indicated.
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The facility will store LPG on behalf of independent LPG specialist Petredec, which ships the fuel from the US and the Middle East. LPG is produced as a by-product in the oil refining process.

Petredec sought an import facility specifically on South Africa’s East Coast, and Richards Bay was seen as the most suitable port to handle this capacity. Being able to receive larger shipments also makes product handling more cost effective, reducing overall logistics costs.

The port is also on Petredec’s shipping route and in close proximity to the main rail and road logistics routes going inland, particularly as most of the LPG will be used in Gauteng, the Free State and the North West. This logistics infrastructure is also of high quality.

The project, currently under construction, was initiated at the end of 2017 and is slated for completion in July 2020. It is expected to increase LPG supply in South Africa by 200 000 t/y, half the country’s current consumption of about 400 000 t/y.

Replacement Energy Source
BTT and Petredec are confident that there is demand for LPG, BTT MD David Leisegang tells Engineering News.

The companies believe that the greatest demand will stem from LPG’s use as a replacement energy source, such as a substitute for wood or paraffin for heating and cooking. The use of these energy sources is still quite prevalent in South Africa, especially in informal settlements and areas where there is not any reliable access to electricity.

Leisegang emphasises that the health benefits of LPG are “considerable”, compared with the energy sources mentioned, as are its safety credentials, as “many of the fires in informal settlements are [the result of] cooking with these sources of fuel”.

LPG has been identified by the World Bank as the most environment friendly of all fossil fuels; therefore, the facility is expected to assist in providing a viable, reliable, safer and more environment- friendly energy alternative.

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The Western Cape Government's bid to secure cleaner forms of energy received a boost due to a R10 million grant from the United States Government through its Trade and Development Agency (USTDA).

Liquefied Natural Gas (LNG) is a key component of a lowest cost energy scenario for the country. This USTDA grant will further develop the opportunity for LNG in the province through a feasibility study on the demand and potential impact of LNG importation at Saldanha Bay. The study will also provide a preferred model for the importation of LNG for gas-to-power electricity generation capacity and for industrial, transportation, commercial, and domestic uses. The grant will be administered through GreenCape who will select a US firm (as required by USTDA) to complete the study.

Minister Winde said: "I would like to commend the USTDA for funding this initiative. We must reduce our reliance on coal and make better decisions for our environment, and our economic future. Natural gas has the potential to play a key role in our plan to grow our alternative energy sources and this study supports the Western Cape's objective to secure a reliable and affordable energy supply. This is also why we are prioritising the growth of our oil and gas sector as part of our Project Khulisa strategy. We are also immensely proud of GreenCape for securing this vital piece of work. Their reputation as South Africa's leading energy advisory and support body is growing from strength to strength."
According to Lida Fitts, USTDA's Regional Director for Sub-Saharan Africa: "USTDA is pleased to support this project, which will help increase access to affordable, reliable energy in South Africa. At the same time, this project will create opportunities for U.S. businesses in one of South Africa's growing sectors."

Mike Mulcahy, CEO of GreenCape, added: "Natural gas has a critical complementary role to renewable energy for power generation in a lowest cost, low carbon, energy future for South Africa. GreenCape is grateful to USTDA for their support in exploring and unlocking these opportunities."

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Trading house Glencore is to buy liquefied natural gas (LNG) supplies from Angola LNG over a multi-year period, adding to similar recent deals between the producer and traders including Vitol.
Angola LNG on Wednesday said the deal was another step toward building its sales book with the most important players in the LNG market.
Last month it sold LNG to Vitol over a multi-year period and also entered a sales deal with the trading arm of Germany's RWE.
Until recently, Angola has been selling all of its LNG via competitive tenders in the spot market, partly because a previous plan to ship LNG to the US fell through because of the US shale gas boom.

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posted by Liesl Frankson on September 15, 2017 in Construction, News, Other infrastructure, Transport​
A new open-access liquefied petroleum gas (LPG) plant was opened this week at the Port of Saldanha on the West Coast of South Africa.
The 30-year contract for the planning, construction and operation of the terminal was awarded to Sunrise Energy, a partnership between the South African private and public sectors, by Transnet National Ports Authority (TNPA) in 2013.
Saldanha Port Manager Vernal Jones said the R109 billion investment would create broader LPG access in the Western Cape and aid in increasing the use of environmentally-friendly and affordable LPG in the national energy mix.
“The terminal will boost the capacity of existing LPG distributors as well as enable the entry of new small, medium-sized and microenterprises, who have had restricted access to the market because of supply constraints and lack of access to enabling infrastructure,” he added.
The future of LPG imports and exportsThe facility comprises a 10.9 hectare landside terminal and waterside multi-buoy mooring connected via a three kilometre subsea and over-land pipeline.
Phase 1 of the terminal entails five tanks with 5 500 tonnes of storage, allowing for a monthly capacity of 17 500 tonnes of LPG. Construction of Phase 1 was completed on schedule and a trial shipment was handled at the terminal at the end of May 2017.
Phases 2 and 3 of the project will see modular expansion that will enable the terminal to meet regional LPG supply demands for the next 27 years.
The Sunrise Energy Terminal is poised to become the country’s largest such facility for handling both imports and exports of LPG the ports authority said.
Earlier this month TNPA’s 24-year concession awarded to black-empowered Burgan Cape Terminals saw a new independent fuel storage, distribution and loading facility become fully operational at the Port of Cape Town.

Commission’s Report relating to the market enquiry into the Liquefied Petroleum Gas Sector
Presentation to the Portfolio Committee on Energy
05 September 2017

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Mozambique's long-delayed offshore gas project with Italy's Eni could be approved within months, sources close to the deal said, sparking investments with the potential to transform one of the world's poorest countries into a major energy player.
Mozambique made one of the world's biggest gas finds in a decade in 2010 but negotiations with operators Eni and U.S. firm Anadarko have dragged on for years due to disputes over terms and concerns about falling energy prices.
But Eni has in recent weeks struck deals with contractors and Mozambique's government which could help it to make a final investment decision (FID) on Oct. 31, industry sources said.
Eni declined to comment. The company's Mozambique concession is split between two huge gas fields, called Coral and Mamba. Eni has previously said it expects to make FID on Coral this year and Mamba in 2017.
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The government is planning a gas-to-power programme that will contribute 3 126 megawatts of electricity.
The National Treasury last week said the move would lead to R64 billion of investments in port, pipeline, generation and transmission infrastructure in Richards Bay, Coega and Saldanha Bay.
Building on the momentum and success of the renewable energy Independent Power Producer (IPP) programme, the mooted gas programme will see more private capital injected in the electricity sector.
The Treasury said the Department of Energy was developing a gas utililisation plan, which would take a 30-year view of the gas industry from a regulatory, economic and social perspective.
Chris Bredenhann, PwC Africa oil & gas advisory lead, said the gas-to-power programme was aligned with the country’s integrated resource plan and the government’s stated intention to reduce our carbon footprint, increase the share of natural gas in the energy mix and encourage the development of a natural gas industry in South Africa.
Energy mix
“The gas IPP programme is also an important element of our energy mix, as it provides an opportunity to create generation capacity in a very short time frame – it does not require the long lead times and construction periods associated with large-scale generation projects like big coal or nuclear builds,” Bredenhann said.
As the government prepares to launch the gas-to-power programme, comparisons will be made with the successful IPP programme for renewable energy, through which the government procured 6 377MW of electricity from the private sector since the programme’s launch in 2009.
Approximately 2 045MW of the procured electricity capacity is connected to the national electricity system.
“There is significant interest in the gas IPP programme from project developers, both large and small. This was demonstrated by the large number of responses submitted to the Department of Energy on the request for information that was issued mid-2015,” Bredenhann said.
“The gas IPP programme is however more complex than the renewable energy programme, as it is exposed to a number of additional components and risks. These include gas supply, receiving and regassification infrastructure, transmission and distribution infrastructure, supply risk, price risk and foreign exchange risk,” he said.
Such matters would be addressed in a request for qualifications that would be issued during the course of this year, which would provide the procurement framework against which developers would be required to bid, he said.
“The success of the programme will therefore depend on the design of the procurement programme and the evaluation of the bids received,” Bredenhann said. There were several potential gas sources, “but the initial gas will be in the form of imported liquefied natural gas. Domestic shale gas and coal-bed methane are future options that may be explored, as are potential offshore gas developments and piped gas from Mozambique,” he said.

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A joint prefeasibility study into a large-scale gas-to-liquids (GTL) plant, based on gas from the Rovuma basin in Northern Mozambique, has been launched amid growing excitement about theenergy potential that could flow as a result of large-scale gas discoveries in the country.

The study is being conducted by JSE-listed Sasol in conjunction with Mozambique’s national oilcompany, Empresa Nacional de Hidrocarbonetos and Italian energy group Eni.

Eni is the operator of the block called Area 4 in the deep waters of the Rovuma basin, which is estimated to hold up to 85-trillion cubic feet of gas. Sasol, meanwhile, already has significant gasinvestment in the Southern African country, but is also a GTL world leader, using a technology based on the Fischer–Tropsch process.

The prefeasibility will assess the viability and benefits of a GTL plant in the region, with Sasolhaving already deployed GTL technology in South Africa, Qatar and Nigeria.

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