The Energy Republic June Edition 2022

THE ENERGY

REPUBLIC

Ofcial Magazine of

Special Edition -

May - June 2022

Challenges, Growth

Opportunities, Forecast

INSIDE STORIES

3Afreximbank, APPO Sign MOU to Establish

Multi-Billion Dollar African Energy Bank

3PERU Seeking Global Investors for Oil, Gas E&P

3Temile Awards New Vessel Building Contract to

Hyundai, NSML to Boast Nigerian LPG Market

3Optimera Consortium Sign $25m

Agreement on Developing Gas

Infrastructure in Lagos Free Zone

3 Equinor and Partners to Invest NOK

9 billion for Gas Development

in the Norwegian Sea

ONEYKA CINDY OJOGBO

EXCUSIVE INTERVIEW

I S S N 2 7 0 5 - 2 0 5 2

THE ENERGY REPUBLIC

CREATING GLOBAL OPPORTUNITIES

Publisher by:

The Energy Republic Marketing

and Communications Limited

(RC: 1919406)

Publisher

Bako Ambianda

Managing Editor

Ndubuisi Micheal Obineme

Editor

Tobi Owoyimika

Legal Counsel

Barr. Jackson Olagbaju

Correspondents:

Genevieve Aningo

Ifeoma Ofole

Samson Binutiri

The Energy Republic (TER) is published by The

Energy Republic Marke ng and Communica ons

Limited. TER provides an in-depth analysis about

the oil industry, and opportuni es around clean

energy sources such as Natural Gas, Hydrogen,

Ammonia, Solar Energy, Wind Energy, Hydro

Energy, Geothermal Energy, Biomass

Energy, among others.

Email: info@theenergyrepublic.com

oilandgasrepublic@gmail.com

Phone: +2348065187468

THE ENERGY

REPUBLIC

Challenges, Growth

Opportunities, Forecast

INSIDE STORIES

3Afreximbank, APPO Sign MOU to Establish

Multi-Billion Dollar African Energy Bank

Special Edition -

May - June 2022

3PERU Seeking Global Investors for Oil, Gas E&P

3Temile Awards New Vessel Building Contract to

Hyundai, NSML to Boast Nigerian LPG Market

3Optimera Consortium Sign $25m

Agreement on Developing Gas

Infrastructure in Lagos Free Zone

3 Equinor and Partners to Invest NOK

9 billion for Gas Development


Ofcial Magazine of

EDITORIAL CONTENT

TEREPUBLIC TOP STORIES

The Energy Republic provides a

comparative analysis of the latest

trends and challenges, including the

outlook of the African Gas Market

with expert commentaries and

recommendations on possible ways

Africa can develop and utilize its

abundant natural gas resources for

domestic use and export market

earnings..... PAGE 24

CENTURION PLUS INTERVIEW

The Energy Republic talks to Oneyka Cindy

Ojogbo, Head of Centurion in Germany, on

the tropical issues in developing major

infrastructural projects in Africa's oil and gas

industry. In her words, she also provided an

overview of how Centurion Plus is helping

investors with the necessary support

needed to doing business in Africa.

PAGE 65

Page 4: SPONSORED CONTENT

Page 15: SPECIAL REPORT

Page 19: INDUSTRY NEWS

Page 38: NIGERIA ENERGY, OIL & GAS

Page 55: ADELAAR ENERGY INTERVIEW

Page 58: TOP STORY

Page 65: CENTURION INTERVIEW

Page 67: AFRICAN ENERGY STORIES

ONEYKA CINDY OJOGBO

EXCUSIVE INTERVIEW

I S S N 2 7 0 5 - 2 0 5 2

SPONSORED CONTENTS

Afreximbank, APPO Sign MOU to

Establish Multi-Billion Dollar African

Energy Bank

"We have Created a Vehicle for the Pooling

of Financial Resources in Africa” - Omar

Farouk

06 08 12

MicCom Makes Cable Industry Attractive

to Fresh Graduates - COO

Optimera Consortium Sign $25m Agreement on

Developing Gas Infrastructure in Lagos Free Zone

By Ndubuisi Micheal Obineme

Optimera Energy Consortium led by

Falcon Corporation, ND Western

Limited, and First Hydrocarbon

Nigeria (FHN) Gas Limited, have signed a

G a s I n f ra structure D e velopment

Agreement worth over $25 million in the

Lagos Free Zone (LFZ).

The Consortium was established as a

Special Purpose Vehicle (SPV), to develop

and operate its natural gas distribution

network within The Lagos Free Zone.

Promoted by Singapore-based Tolaram

Group, Lagos Free Zone is the first private

free trade zone in Nigeria. Centrally located

in Lagos State, the commercial center of

West Africa's largest economy, the zone

covers an area of 830 hectares.

According to the Chief Financial Officer,

FHN, Kayode Olatunbosun, the investment,

which is for the construction phase, would

be funded through equity. He stated this

during the agreement signing ceremony for

the gas development infrastructure.

Speaking further, the Managing Director

and Chief Executive Officer, Lagos Free

Zone, Dinesh Rathi, said the Consortium,

through their SPV, would deliver

uninterrupted piped gas by early 2024 to all

the enterprises within the Lagos Free Zone.

“We welcome the consortium on this

collective journey towards unlocking

Nigeria’s true potential,” he stressed. He

added that in its continued efforts at Lagos

Free Zone to provide a world-class

04

Chief Execu ve Officer, Lagos Free Zone, Dinesh Rathi (le ); Managing Director, Falcon Corpora on Limited,

Prof. Joseph Ezigbo; Chief Execu ve Officer, ND Western Limited, Mr. Eberechukwu Oji; Managing Director,

Op mera Energy, Mrs. Audrey Joe-Ezigbo; Managing Director, Fintech & Infrastructure, Tolaram, Mr. Navin

Nahata and Managing Director, First Hydrocarbon Nigeria Limited, Mr. Femi Bajomo during the signing

ceremony of the Gas Infrastructure Development Agreement for Lagos Free Zone, held in Lagos

industrial ecosystem that enhances the

competitive positioning of Nigeria as a

manufacturing hub, its partnership with the

consortium of Falcon Corporation, ND

Western Midstream Limited, and FHN Gas

Limited, is a landmark development.

He stated that with the Lekki Port’s

construction slated to be completed in

December 2022, there was a need to secure

a reliable arrangement to meet the energy

needs of its fast-growing tenant base,

expressing confidence that its partnership

with the Consortium would help LFZ realize

the same.

“This is a unique transaction in the history of

Nigeria’s downstream sector wherein a

consortium formed of reputable upstream,

midstream, and downstream companies

have come together to ensure gas supply to

LFZ, the sunrise economic epicenter of West

Africa. “

THE ENERGY REPUBLIC I SPECIAL EDITION

SPONSORED CONTENT

Furthermore, the Managing Director,

Optimera Energy, Mrs. Audrey Joe

E z i g b o , s a i d , “ T h e O p t i m e r a

consortium is made up of like-minded

shareholders passionate about a

common goal: accelerating the further

growth of domestic gas utilization in

Nigeria. Having reliable dedicated gas

supply infrastructure installed in the

LFZ adds tremendous value to existing

industrial concerns and will increase

the Zone‘s attractiveness to future

customers.”

PHOTO STORIES: SIGNING CEREMONY

Ezigbo said that the endeavor would be

a big step towards actualizing the

objectives of the ‘Decade of Gas‘

initiative, of which gas-based industrial

growth is a significant part.

“The Petroleum Industry Act (PIA)

provides the necessary regulatory

environment for projects such as these

to succeed in Nigeria. We look forward

to working collaboratively with the

Nigerian Midstream & Downstream

Regulatory Authority (NMDPRA) in this

project’s development and operation

phases,” she said.

She added: “The Consortium members

bring over so many years of experience

and expertise in operating across the

Natural Gas value chain from upstream

production in the Niger Delta to

downstream distribution to industries

in Lagos. Our dedicated Project Team

will work diligently with a strict

adherence to the highest standards of

safety, operational excellence, and

regulatory compliance to deliver this

project on time and under budget, as

we have done within our respective

portfolios.”

The Optimera consortium is a

collaboration between upstream,

midstream and downstream industry

players in Nigeria. The consortium

comprises of Falcon Corporation Ltd,

ND Western and First Hydrocarbon

Nigeria (FHN) through their respective

subsidiaries.

05


SPONSORED CONTENT

Afreximbank, APPO Sign MOU to Establish Multi-Billion

Dollar African Energy Bank

Following International Oil

Companies (IOCs) divestment and

the shift in global investment

trends under the energy transition

agenda, African Export-Import Bank

(Afreximbank) and African Petroleum

Producers Organization (APPO) has

s i g n e d a M e m o r a n d u m o f

Understanding (MoU) to establish a

multi-billion-dollar African Energy Bank

aimed at scaling up private sector

investment in African oil and gas

projects.

According to African Energy Chamber

report, the bank will provide critical

financing for new and existing oil and gas

projects, as well as energy developments

across the entire value chain. The bank

comes at a particularly critical time for

Africa’s energy sector.

The MoU was signed by Mr. Rene

Awambeng, Director & Global Head,

Client Relations, Afreximbank, and Dr

Omar Farouk, Secretary General of APPO,

in the presence of H.E. João Lourenço,

President of the Republic of Angola,

APPO Ministers and African Energy

Chamber (AEC) Executive Chairman NJ

Ayuk.

While the developed world calls for the

end of fossil fuels due to climate change,

Africa continues to face the crisis of

energy poverty. Over 600 million lack

access to electricity and 900 million lack

access to clean cooking solutions,

leading to stakeholders calling for the

rapid expansion of the oil and gas sector,

recognizing the role these resources play

06

in making energy poverty history. Despite

these calls, global investors are shying away from

hydrocarbons, leaving the continent without the

investment it needs if it is to capitalize on its

resources.

According to the AEC’s Q1 2022 Report, the State

of African Energy, from the peak in 2014 at $60

billion, capital expenditure in Africa declined to

$22.5 billion in 2020. Despite projected increases

to $30 billion in 2020, significant levels of

investment are still required, and thus, the role of

African financial institutions has been

emphasized. Organizations such as the

Afreximbank have already made notable progress

to drive oil and gas project developments. At the

end of 2020, the Afreximbank’s total assets and

guarantees stood at $21.5 billion, with

shareholder funds amounting to $3.4 billion.

Other institutions including the African

Development Bank – with an active portfolio of

projects upwards of $12 billion – also represent

critical providers across the African energy

landscape. However, more needs to be done, and

if large-scale discoveries such as those made in

Namibia and Ivory Coast are to be sufficiently

developed, more capital needs to be made

available.

Stepping into this picture, the Afreximbank-APPO

MoU aims to alleviate these challenges, ensuring

the provision of capital for Africa’s upcoming oil

and gas projects. Based in Africa, the bank will

operate as an independent entity, regulated and

led by experienced professionals that know and

understand Africa’s energy needs.

The proposed bank will not be a substitute for

private investment, however, but rather, will

serve as a catalyst for Africa-directed investment.

“The African Energy Chamber has been pushing

for the creation of an African Energy Bank, one

that is African-based and Africa-focused, and I

am proud to announce that the Afreximbank and

APPO have taken the first steps towards its

creation. The bank will be critical for Africa’s

energy sector, serving as a catalyst – not a

substitute – for private investment in African

energy. This is a practical strategy for prosperity

and a pragmatic vision that must be embraced by

all who want to make energy poverty history and

fight climate change,” states NJ Ayuk, Executive

Chairman of the AEC, adding that, “Why should

our pension funds go to European banks who say

they will not finance Africans and call us risky? We

need to use that money to finance oil and gas.”

The proposed African Energy Bank will operate in

the same way as the APPO-created Africa Energy

Investment Corporation – a developmental

financial institution created to channel resources

towards the development of Africa’s energy

sector. In addition to ensuring capital is made

available for African oil and gas, the bank will

serve as a vessel for mobilizing African-sourced

finance. Rather than utilizing international banks

for pension funds, the bank will serve as an

investment corporation that will channel these

funds into African projects, thus, ensuring high

returns of investment as well as the development

of Africa’s energy sector. The benefits will be twofold:

the funds will help drive oil and gas

development while the oil and gas projects will

drive socioeconomic growth through the increase

in access to energy. Accordingly, the role this bank

will play is pivotal.


SPONSORED CONTENT

"We have

Created a Vehicle

for the Pooling

of Financial

Resources in

Africa” -

Omar

Farouk

Dr. Omar Farouk Ibrahim, Secretary-General of the African Petroleum Producers Organiza on (APPO),

talks to The Energy Republic about the challenges in African oil and gas industry, including APPO's

plan to harnessing the Con nent’s abundance hydrocarbon resources and stop depending on

foreign aid to develop these resources. INTERVIEW BY: NDUBUISI MICHEAL OBINEME

TER: How is APPO strategizing to harness

Africa's oil and gas resources and alleviate

energy poverty in the continent?

Farouk: First of all, I would like to thank you

for your interest in APPO, the African

Petroleum Producers Organization, and the

well-being of the African population. As you

rightly noted, Africa is richly endowed with

many energy resources, from oil and gas to

solar and hydro and other renewables.

We have been producing oil for close to a

century. The economies of many African

countries are heavily dependent on oil and

gas export revenue. We produce about 8

percent of daily global oil output and 6

percent of gas. Yet, we are also made to

believe that we can collaborate with those

who colonized us. Our people have since

realized the mistake in this thinking and we

are coming together to cooperate in

economic ventures. That way we can raise

the funds, develop the technology and also

develop the market. With 1.3 billion people,

over 60 percent of who are youth, we have

the potential to consume all the oil and gas

we produce if we develop that market by

empowering these people.

TER: Following the global energy transition

agenda, APPO has insisted that Africa especially

oil-producing nations cannot abandon their

hydrocarbon resources and transition to

renewable energies. What's APPO main building

blocks for Energy Transition?

Farouk: First of all I should like to make it clear

that APPO is not against energy transition or any

policy that aims to make the world a better place

for all its inhabitants. We are not contesting the

science of climate change. But what we are saying

is that energy transition is not a one-size-fits-all

programme. It has to take into account the

various levels of development of the peoples of

the world.

The developed countries of the world can afford

to move fast with energy transition today because

they cheated the world one hundred and fifty

years ago. These people found out about the

dangers of emissions from hydrocarbon use as far

back as the 1850s. Their scientists discovered

these dangers. But the results of those studies

were hidden from the public because these

countries were fast industrializing their

economies. They did not want anything to halt

that process. They wanted to make life better for

their people and so refused to stop fossil fuel use.

Now that their economies have moved from

dependence on a lot of energy to manufacturing

knowledge and artificial intelligence and

providing services, and our economies are on the

verge of industrialization, they suddenly

remembered the dangers of fossil fuels which

they had known for over 150 years. Our position is

that the developed countries have lost the moral

right to tell us to abandon fossil fuels for the

simple fact that they knew about these dangers

and hide it from the world because it was in the

interest of their societies to do so.

Africa is saying that develop all the forms of

energy can be developed. The world needs all the

energy it can get. We must not abandon fossil for

any energy at this time when no one can

guarantee that the renewables can be developed

to meet world demand. And Africans should

know that if renewables fail, the little available

energy shall not come to Africa but to the

developed countries because Africa cannot

compete with these countries on purchasing

power. Remember when Covid-19 struck? It was a

universal crisis, but how was Africa treated in the

distribution of the vaccines?

In addition, what percentage of the global

emissions are attributed to Africa?

TER: What would you recommend to African oilproducing

countries as a strategy to adopt a

sustainable funding model for its hydrocarbon

resources?

08


SPONSORED CONTENT

Farouk: All oil and gas producing

countries should pool resources

together to see the industry as a

continental industry, situated within

national boundaries. We should agree

to dedicate a certain percentage of

sales of oil and gas revenue to a

collective fund for the development of

the oil and gas industry in Africa.

In this respect, we have created a

vehicle for the pooling of financial

resources to pursue collective goals for

the industry in Africa. APPO has

founded the Africa Energy Investment

Corporation, AEICorp, whose mandate

is to mobilize financial resources for the

oil and gas industry in Africa.

APPO Member Countries as well as

private investors will be able to

subscribe to the fund. It will be callable

capital, allowing member countries and

other investors to release capital as

needed. This signals the potential to

a c h i eve a n d m a i nta i n a h i g h

international rating by AIECORP based

on strong liquidity, also providing an

excellent opportunity for investors to

participate in a low-risk pan-African

growth story.

AEICORP is, therefore, well-positioned

to provide financial and advisory

support to harness Africa's natural

resources with a focus on energy, unify

the continent's energy ecosystem and

accelerate the continent's economic

growth and development. It exists as

the main provider of financing for the

energy sector in Africa as well as a

channel for local and international

funds to the energy sector.

Despite its abundant energy resources,

there is no doubt that Africa still has the

largest number of people without

access to modern energy. AEICORP is

working to remedy this situation, as it is

convinced that without energy, Africa

cannot move to the next level.

TER: Infrastructure, Technology, and

Finance have been identified as the

main challenges hindering the growth

opportunities in the African oil and gas

industry. In what ways can African

government address these challenges

i n - country a n d m o ve b e yo n d

depending on foreign aid to develop its

oil and gas sector?

Dr. Omar Farouk Ibrahim, APPO's Sec-Gen

Farouk: For finance, I have already

highlighted what we are doing with the

establishment of AEICorp and where we see

it taking us. We are confident that Africa

shall be able to raise the required funds to

sustain the industry even after the external

sources have dried up. And we shall not

need that much finance as we are being

made to believe, because a good part of the

money that is said to be expended on CAPEX

and OPEX is inflated by the international oil

companies. And then there is the cost of

money, namely the cost of borrowing. But if

we are to raise these funds internally by

asking each oil and gas producing country to

dedicate 20 percent of oil revenue windfall,

not the total revenue realized, to a fund

dedicated to the development of the

industry in Africa, I am confident that Africa

can raise the billions it needs to sustain the

industry in the absence of external

interests.

On technology, I should like to emphasize

that different countries on the continent

became players at different times and

different levels. This fact explains the

differences in the level of mastery of the

industry among African countries. The

beauty of the industry in Africa especially in

the last decade or so, is that there is

increasing cooperation and collaboration

among players in the industry. Many new or

small players have found it wise to go to

other African countries that have been in

the industry for a longer period to learn

from their experiences.

From experience, I know that several

African countries have sent teams to Nigeria

to learn various aspects of the oil and gas

industry, including the Nigerian model of

local content provision. But what is missing,

in my humble opinion, is a continental

initiative.

I want to state categorically that the days of

going alone in this industry on this continent

are over. Foreign financiers and experts and

their technologies are gradually leaving us.

We need to pool our resources before it is

too late. Together, we have what it takes to

extend the life of the oil, if not for the world

market, at least to power our continent.

I endorse the words of the ancients who

said, and I quote, "If you want to go fast, go

alone. But if you want to go far, go with the

others". Yes, we want the life of the oil, the

pillar of our national economies, to last as

long as possible to allow us to use its

revenues to effectively diversify our

economies and make life better for our

people.

TER: As tensions between Russia and

Ukraine war continue to rise, Can Africa

become the preferred gas supplier as

Europe seeks an alternative to Russian gas?

Farouk: If Africa has the volume of gas that

the developed countries need for their

economies, these countries would have

preferred to buy African, not Russian, gas

even if it turns out to be a little more

expensive. And the reason is simple. Even

though they are aware of the instability

rocking many African countries, including

the sources of those resources, they also

know that the security of supply is better

guaranteed from Africa.

Let me explain what I mean. Given the huge

dependence of Europe on Russian energy,

do you think that if Russia was a small

country without military and nuclear power,

most of the countries in Europe would have

succumbed to the pressure from the more

powerful countries to deny themselves

access to Russian energy during winter? I

think not. What would have happened is

that they would have invaded Russia to

secure the source of their energy. So, if

Africa becomes the main supplier of energy

to these countries, it should be prepared to

do as they dictate. That is why it is important

that we do not become dependent on any

external market for our resources. We

should develop the markets within our

continent.

And this brings me to the hypocrisy of the

advocates of the quick energy transition,

who are calling for a speedy halt to fossil fuel

investments, production, and use.

709


SPONSORED CONTENT

The same people that have been

strongly advocating an end to the use of

fossil fuels, were rushing to OPEC and

its Member Countries to ask them to

ramp up production of the same fossil

fuels because their countries need

energy. This is no different from what

they did some 150 years ago when their

scientist discovered the dangers of

fossil fuel emissions to the atmosphere.

Instead of stopping the use of fossil

fuels, they hid the findings and

continued to use fossil fuels until their

economies got to a stage where it does

not need fossil fuels to sustain their

growth. Then they remembered the

dangers of fossil emissions and are now

telling the world not to use what they

used for over 150 years to develop their

societies and economies.

It is pleasing to note that on February

18, 2022, in Niamey, the Republic of

Niger, APPO witnessed the signing of

the agreement for the relaunch of the

construction of the trans-Saharan gas

pipeline with a length of 4128 km, with

an annual capacity of 30 billion m3

traversing three APPO Member

Countries – Nigeria through Niger to

Algeria and Europe. The Ministers of

energy of these three APPO Member

Countries signed the deal on behalf of

their countries. Although targeted at

Europe, the TSGP has the potential of

supplying gas to the communities

through which it passes, thus creating

the possibility of developing cottage

industries and even large-scale

industries. And with time, the pipeline

can also supply gas to other countries in

the sub-region like Burkina Faso, Mali,

etc.

Both fossil and renewable energy

resources are exceptionally abundant

in Africa. This is the truth. And God has

blessed us with these riches.

Unfortunately, African countries have

remained very dependent on their

crude oil exports, with refining

infrastructure having a very limited

capacity and operating at high costs.

This explains the export of African

crude oil to European refineries and the

return of refined products to African

countries at exorbitant costs.

To put an end to this paradox and

quickly take advantage of this favorable

environment, we are called upon to

create and secure physical oil markets,

Dr. Omar Farouk

Ibrahim

especially the flows between production

areas and supply and consumption areas.

TER: How can African producers work

together to attract the investment needed

to build infrastructure that will allow them

to expand exploration, production, and

exports to meet the anticipated increase in

energy demand within the continent and

across the world?

Farouk: APPO set up a Cooperation and

Mutual Assistance Framework Agreement

which defines the main areas of

cooperation between APPO Member

Countries' Ministries of Hydrocarbons, the

National Oil Companies, economic

operators, and research and training

institutes or centers. The main specific

objectives targeted by APPO are:

- The pooling of their technical and scientific

capacities from upstream to downstream,

- The joining of forces by National Oil

Companies, oil companies, and services

companies to bid for tenders and contracts

relating to hydrocarbon projects and related

industries and activities in the APPO

Members Countries and/or in any other

country,

- The implementation of programs for the

exchange of information and experience,

- The development and implementation of

mutual technical assistance programs by

the secondment of highly qualified

personnel in the hydrocarbon field and

related activities,

- The provision of targeted technical

assistance in the environmental aspects of

hydrocarbon development such as gas

flaring reduction and oil spill management.

TER: What are the main focus areas of

APPO's CAPE VIII in Angola?

Farouk: The main theme of this CAPE 8 is

"The Future of The Oil And Gas Industry In

Africa: Opportunities, Challenges And

Development" and this one is very well

chosen and deals with issues in line with the

concerns of African countries and the major

challenges facing APPO Member Countries,

as well as the promotion of mining fields or

business opportunities through exhibition

stands and or specific presentations or

communications. They will allow exchanges

between experts and policy and decisionmakers.

The theme of CAPE VIII is very topical, and

you would have noted its aptness. The

Congress will be the place to elucidate

certain misunderstood subjects and the illconceived

interpretations that certain

actors and decision-makers have of the

concept of Energy Transition. In reality, the

Energy Transition should not be seen as a

threat to Africa with its abundant proven oil

and gas resources as many think. Far from it,

it is an opportunity to be seized by Africa to

diversify its economies, industrialize and

develop as soon as possible. However, the

Energy Transition poses enormous

challenges to Africa. Africa must take

ownership of its oil and gas industry by itself

at a time when foreign partners are losing

interest in fossil fuels. To do so, African

c a p a c i t y b u i l d i n g , t e c h n o l o g y

appropriation, African oil market

development, and financing of the sector

are the major challenges that Africa must

address.

The African countries must go in synergy to

fa c e t h e s e c h a l l e n ges, t h e n t h e

development of Continental Content and

not Local Content is required for Africa.

Although Africa currently accounts for less

than 10% of global oil and gas production,

there is a consensus that Africa will be most

affected, economically, and socially, if the

world moves rapidly away from fossil fuels.

Indeed, although the continent has over

125 billion barrels and 600 trillion cubic feet

of proven oil and gas reserves respectively,

the African industry has been largely

dominated by foreign technology,

financiers, and operators.

710


SPONSORED CONTENT

Bukola Adubi, COO - Miccom Cables

MicCom Makes Cable Industry

Attractive to Fresh Graduates - COO

3Berates growing counterfei ng

prac ce

3Advocates FG support for

increased FX earnings

The Chief Operating Officer (COO)

of MicCom Cables & Wires Ltd,

Mrs. Bukola Adubi, has said

that the company engages in

intentional training of fresh graduates

to make the cable industry attractive to

more professionals.

Over the years, MicCom Cables & Wires

has developed a culture of investing in

building the capacity of its workforce by

training them in-house, locally, and

sometimes sending them overseas for

special training. As a result, the

company can retain its employees for a

longer time -- keeping most of them for

more than 20 to 30 years in the system,

which enables the transfer of skillsets

through internal training.

Adubi who identified the dearth of

good and experienced personnel in the

cable industry as a challenge, also listed

sub-standard and adulteration of cable

brands, and failures to implement local

content laws by some government agencies

a s c h a l l e n g e s c o n f ro n t i n g c a b l e

manufacturers.

Speaking in an interview with Majorwaves,

Adubi who is also the President of Cable

Manufacturers of Nigeria (CAMAN), noted

that there is an estimated loss of several

hundreds of millions of naira monthly due to

fake, substandard, or adulterated cables in

the market.

Making a case for duty waiver on raw

materials for cable manufacturers, she

described duty waiver as an offshoot of

financing and competitiveness, adding that

if an accredited manufacturer is given a

waiver on their raw materials, it will make

them competitive and enable them to be

able to compete with Asian and other

European imports.

President Muhammadu Buhari signed

Executive Order 3 (EO3) and Executive

Order 5 (EO5) to deepen local content in

Nigeria. Speaking on how the EO3 and EO5,

as well as the local content laws, have aided

the operations of cable manufacturers, she

commended the Nigerian Content

Development and Monitoring Board

( N C D M B ) f o r i t s e f f o r t s i n t h e

implementation of the Nigerian Oil and Gas

Industry Content Development (NOGICD)

act and encouraged other agencies like the

Transmission Company of Nigeria (TCN),

Rural Electrification Agency (REA), among

others to follow suit.

She said, "We have not been enjoying this to

the height we should be. The one industry

that has fully supported and implemented

this on our behalf is the oil & gas industry.

The NCDMB under the direction of the

Executive Secretary, Engr. Simbi Wabote has

done great things for the industry and we

are very thankful for this. We pray the other

industries and parastatals follow suit."

MicCom Cables and Wires Ltd is an ISO

9001:2015 certified company, which has

received various awards & certifications.

The company, which is known for

manufacturing international standard

cables, has a huge market share in the West

African subregion.

MicCom Cables & Wire Ltd is the first

indigenous cable manufacturing company

in Nigeria. Its business journey started in

1978 and has ever since produced quality

cables and wires for the local and

international markets.

12


SPONSORED CONTENT

Sensirion Unveils Ultra-high Accuracy SHT45

Humidity and Temperature Sensor

Sensirion has unveiled the new highprecision

SHT45 humidity sensor as part

of Sensirion’s 4th-generation humidity

sensors – the SHT4x series. The SHT45 offers the

highest accuracy for humidity and temperature

backed up by Sensirion’s many years of sensing

technology expertise.

Sensirion SHT45 humidity sensor

Stäfa, Switzerland – The industry-proven

humidity and temperature sensor offers an

attractive value for its price on the market and

extends the use of high-performance

applications. Tape and reel packaging,

combined with its suitability for standard SMD

assembly processes, make the SHT45 ideal for

high-volume applications.

The SHT45 builds on a new and optimized

CMOSens® chip, offering ultra-low power

consumption and high accuracy specifications.

Sensirion’s CMOSens® Technology provides a

complete sensor system on a single chip thanks

to a fully calibrated digital I2C fast-mode plus

interface. The SHT45 covers operating ranges

from 0 to 100 % RH and from -40°C to 125°C

with accuracies of ± 1 % RH and ΔT = ± 0.1°C,

ensuring reliable measurement results thanks

to its long-term stability and high precision.

With an extended supply voltage range of 1.08

V to 3.6 V and 400 nA average current, the

SHT45 is perfectly suited for the most

demanding applications. The small size in a

robust DFN housing enables integration into

challenging designs while meeting the strictest

reliability demands, as demonstrated by its

JEDEC JESD47 qualification.

FPSO World Congress 2022 makes

its grand return in September

“We are continuing to push the boundaries of

humidity sensing with the SHT45 through

increased accuracy and a wide supply voltage

range. Thanks to more than 20 years of

experience in developing humidity sensor

technology and our end-of-line testing, we can

guarantee the accuracy specifications for every

part shipped,” says Maximilian Eichberger,

Director of Humidity and Temperature Sensor

Product Management at Sensirion.

The resilient FPSO industry has

seemingly brushed off the

impact of the pandemic as Oil

prices continue rising and FPSO

projects return to the table. According

to industry reports, FPSO investments

are projected to reach $67 billion by

2025, with 20 projects expected to be

awarded by the end of 2022. This

comes alongside a shift in focus on

renewable energy, the energy

transition and achieving sustainability

in projects.

The 23rd Annual FPSO World Congress

2022 returns on 12-15 September and

will be held at Sands Expo &

Convention Centre in Singapore. At

this year’s special edition, there will be

2 exclusive Focus Days happening

alongside the main congress – FLNG &

FSRU Asia and Offshore Wind Asia. The

focus on sustainability has become

essential, and FPSO owners need to

further solidify their position in an

evolving industry. This rising pressure to

ensure sustainability in projects and

renewed focus have forced FPSO project

stakeholders to re-evaluate existing

processes in building “green FPSOs”,

explore alternative power sources and

invest in new technologies to optimise

operational safety and costs.

FPSO World Congress 2022 remains the

focal point for industry players to gather

a n d e x p l o r e b e s t p ra c t i c e s i n

strengthening the future of FPSOs along

with the industry’s transformative

roadmap to sustainability and renewable

energy.

13


SPECIAL REPORT

API INDUSTRY OUTLOOK

Dr. R. Dean Foreman

Chief Economist,

American Petroleum Institute

By Dean Foreman

Quarterly Outlook: Demand Outpaced Production,

Increased U.S. Dependence on Imports

The latest API Industry Outlook for Q1

2022 reinforces much of what we’ve

observed over the past year – that

petroleum demand has increased

steadily along with the economy, and

supply lacked the workforce and supply

chain foundation, financial backing and

supportive energy policies required for

production to keep pace.

Meanwhile, global events have made

energy markets uncertain in many ways

but predictable in many others –

including the need for a cogent U.S.

energy policy that fosters American

energy growth, lacking under the Biden

administration.

First and foremost, the report demonstrates

how U.S. and global petroleum demand

have outpaced production, led to lower

inventories and increased U.S. dependence

on imports. Together these factors

supported the highest oil prices since 2014,

even before Russia’s war on Ukraine

escalated in late February.

Key underlying factors to consider, as we

discussed here last September, remained: 1)

the natural decline of global oil production

in million barrels per day (mb/d) compared

with 2) the pace of the global oil industry’s

investment and production growth. As we

noted in September:

The need for new oil has two components:

1) new demand growth and 2) the

replacement of natural declines in well

production. EIA currently estimates global

oil consumption will rise by 4.5 mb/d to

102.9 mb/d in December 2022 from 98.4

mb/d in August 2021. Separately, the

International Energy Agency (IEA) has

historically estimated that global oil

production declines by 4% to 6% per year,

with the lower bound requiring investments

in workover programs to stem the decline.

This means the natural decline of

production in 2022 could range between 4.0

mb/d and 6.0 mb/d.

15


SPECIAL REPORT

T h e U. S . E n e r g y I n fo r m a t i o n

Administration (EIA) estimates that the

global oil market continued to be

relatively short of supply, with

December 2021 global demand of an

estimated 101.6 million barrels per day

(mb/d) that outpaced production of

98.4 mb/d – a deficit of 3.2 mb/d (3.1%)

and the eleventh consecutive month of

market deficits that cumulatively

amounted to more than 24 mb/d, per

EIA. The December production of 98.4

mb/d compares with global production

of 101.3 mb/d in December 2019,

before the pandemic.

Moreover, the United States’ oil

production growth of more than 5.0

mb/d between January 2017 and

December 2021, per EIA, represented

more than 86% of global growth over

the same period, while production by

the rest of the world declined.

Looking at the numbers, starting with

the global economy, something new

appeared this past quarter as we took

stock of the consensus economic

forecasts of GDP growth through 2024.

On the heels of unprecedented economic

stimulus efforts since the 2020 COVID-19

recession, GDP growth has been expected

to be strong but slower as the stimulus’

effects wear off.

Initial consensus estimates for 2024,

however, showed that about two-thirds of

country economies around the world are

expected to have a deceleration at that

point (up from 45% in 2022), many to

recessionary levels. As central banks

deployed most of their conventional and

u n c o n v e n t i o n a l m o n e t a r y p o l i c y

instruments – and signaled a tightening of

monetary policy – our attention turns to the

consensus expectation that the U.S.

economy could slow in both absolute and

relative terms over the next two years.

Historically, this has had implications for the

strength of the U.S. dollar as well as crude oil

prices.

However, the ongoing impact of U.S. and

global GDP growth, having outpaced its

historical average levels, has been strong

continued demand for oil and natural gas

along with the economy. EIA estimates that

2022 global oil demand will increase by

another 3.5 mb/d in

2022 and reach as high as 104 mb/d at the

end of 2023. EIA also estimates that global

natural gas demand could increase by more

than 3.0% by 2024 to a record 150 trillion

cubic feet (411 billion cubic feet per day,

bcf/d).

These estimates largely do not reflect the

impact due to Russia’s war on Ukraine but

could be plausible if the economy remains

on track as the consensus expects.

It appears Russia’s war on Ukraine could be

negative for economic growth as well as

global oil and natural gas production, with

the International Agency (IEA) currently

projecting “a shut-in of 3 mb/d of Russian oil

supply starting from April, but losses [that]

could increase should restrictions or public

condemnation escalate.” It’s clear concerns

remain that significant volumes of Russian

energy could be impacted – through

physical disruptions, by sanctions that

prohibit flows, or if Russia decides to wield

its energy as a weapon by withholding it

from the global market, as we discussed

here. As such, the health and viability of

U.S. production growth, both for crude oil

and natural gas, could be critical to global

management of risk and uncertainties

posed by Russia.

Based on the quarterly summary, the

affirmative view is that the industry’s

capital expenditures supporting U.S.

and global crude oil and natural gas

production rose by nearly one-third to $56

billion between the third and fourth

quarters of 2021. However, this $56 billion

in Q4 2021 was well short of the $71

billion in Q4 2019 expenditures, before the

pandemic.

716


SPECIAL REPORT

At the same time, total U.S. and

international drilling rig activity also

accelerated by 29% year-on-year (y/y)

as of February, per Baker Hughes, but

remained more than 30% below its

level at the same point in 2019. These

observations of industry investment

and drilling show that the economic

incentives for resource development

have remained intact and moved in

positive directions, but the aftereffects

of the pandemic and headwinds to

energy policy continued to weigh on

the strength of their responses.

Consequently, an apparent gap

between drilling activity and its

historical responsiveness to prices

continued through the first quarter of 2021.

Historically, a combination of demand

outpacing production, lower inventories

and increased imports has been a recipe for

upward pressure on prices. And that

pattern repeated itself in the first quarter of

2022, with and without the influence of

Russia’s war on Ukraine. As the prices for

crude, petroleum fuels, natural gas and

virtually everything made from them rose

recently, we also have continued to monitor

U.S. consumer impacts. For industrial

consumers, the news has appeared to

remain good. As we discussed in API’s latest

Monthly Statistical Report (MSR), API’s

Distillate Economic Indicator suggested

solid growth of U.S. industrial production

and broader economic activity through

February 2022. However, as reported by

the 2TUniversity of Michigan’s consumer

sentiment index, consumer sentiment

readings that historically have been leading

indicators of changes in spending fell to

their lowest levels in early March compared

with any point with the pandemic since

2020. Contemplate this for a moment:

Consumers reported in early February that

they felt worse about their economic

prospects than at any point during the

pandemic or its path since then.

717


SPECIAL REPORT

The affirmative news, however, is that

payment delinquencies for home

mortgages, auto loans and credit cards

fell over the past year and remained

historically low. Delinquencies

generally follow after (not before)

consumer financial stress and so are

considered lagging indicators.

However, since U.S. households

assumed increased and record

amounts of debt and energy prices

have also risen over the past year or so, it is

notable that the delinquencies have fallen.

Consequently, based on the low

delinquencies and the Bloomberg

consensus’ relatively strong continued

growth expectations, it is possible

consumers could pull through and continue

to support economic growth. But lower

energy prices have historically been

important to everyone and across all

income brackets. In the big picture, energy

is a fundamental pulse of the economy and

an integral component to consumer goods.

The most assured path to support U.S.

consumers and help keep the economy on

track is to support U.S. crude oil and natural

gas production. This has been a recurrent, if

not indelible, theme through the 2020

downturn and its recovery since then.

About The Author

Dr. R. Dean Foreman is API’s chief economist and an expert in the economics

and markets for oil, natural gas and power with more than two decades of

industry experience including ExxonMobil, Talisman Energy, Sasol, and Saudi

Aramco in forecasting & market analysis, corporate strategic planning, and

finance/risk management.

He is known for knowledge of energy markets, applying advanced analytics to

assess risk in these markets, and clearly and effectively communicating with

management, policy makers and the media.

718


INDUSTRY NEWS

South Korea: TotalEnergies Signs LNG

Long-Term Sale Contract with Hanwha

Corporation

Sensirion inside: Temperature and humidity

monitor THEye

20 22 30

Equinor and Partners to Invest NOK 9

billion for Gas Development in the

Norwegian Sea

Sempra Infrastructure and KOGAS Sign MOU Exploring

New Infrastructure Opportunities for Energy Transition

S empra Infrastructure, a subsidiary of

Sempra, and Korea Gas Corporation

(KOGAS) has officially announced

that the companies have entered into a

memorandum of understanding (MOU) to

explore opportunities to cooperate in the

global energy transition to lower-carbon

and zero-carbon fuels.

The MOU contemplates the companies'

joint collaboration around project

development and offtake across multiple

business areas, including liquefied natural

g a s ( L N G ) , c a r b o n c a p t u r e a n d

s e q u e s t r a t i o n , a n d h y d r o g e n

infrastructure.

"We are excited to work with KOGAS to

advance the development of a series of

critical, energy-transition projects," said

Justin Bird, CEO of Sempra Infrastructure.

"Given our shared values and strategies,

there are multiple opportunities for

Sempra Infrastructure and KOGAS to

collaborate across the lower-carbon value

chain to deliver cleaner and more secure

energy to our partners around the world.”

"Signing this MOU, KOGAS and Sempra

Infrastructure share a strong commitment

to decarbonization and green energy,

including a joint commitment to take a

leadership role in the lower-carbon energy

market. KOGAS will focus on securing a new

growth engine for the future by developing

new business projects with Sempra

Infrastructure," said Chae Hee-bong,

KOGAS CEO and President.

Sempra Infrastructure is currently

developing multiple world-class energy

transition projects in North America,

including LNG export projects to serve

customers in both the Atlantic and Pacific

Basin, as well as new opportunities in

renewable energy, carbon capture and

sequestration, hydrogen and ammonia.

The referenced MOU is non-binding, and

the development of these joint projects is

subject to a number of risks and

uncertainties, including reaching definitive

agreements, securing all necessary permits,

and reaching a final investment decision

with respect to each project.

Sempra Infrastructure delivers energy for a

better world. Through the combined

strength of its assets in North America, the

company is dedicated to enabling the

energy transition and beyond. With a

continued focus on sustainability,

innovation, world-class safety, championing

people, resilient operations and social

responsibility, its more than 2,000

employees develop, build and operate clean

power, energy networks and LNG and netzero

solutions, that are expected to play a

crucial role in the energy systems of the

future.

KOGAS has been supplying natural gas safely

and reliably for 38 years to improve

convenience in the lives of citizens and

playing a key role in the transition to ecofriendly

energy. The company, as Korea's

representative global energy company, is

currently engaged in 25 overseas projects

from upstream sector to the downstream

sector. KOGAS will now lead the world

energy industry to a new horizon to become

the global standard for energy enterprise

beyond Korea as the paradigm shifts

towards eco-friendly energy.

KOGAS conducts overseas resource

exploration through international bidding

and stake acquisition, identifies the most

promising geological structures of oil and

gas fields using extensive geological serveys

and various exploration methods, and

confirms the existence of resources through

drilling. KOGAS Gas Project in Africa:

Mozambique Maputo Natural Gas

Distribution Project. KOGAS has been

working on this project to supply natural gas

to Maputo city in Mozambique by

constructing the gas pipeline and operating

facilities.

3Business structure : KOGAS(70%) :

ENH(30%)

3Business method : BOO(Build-Own-

Operate)

3Project Scale : Pipeline 82km,

IRS(Intermediate Regulation Station) 1EA

3 P r o j e c t p e r i o d :

construction(2013.6~2014.7, finished),

operation(2014.5~2034.5)

3 K O G A S r o l e : i n v e s t m e n t ,

E P C ( E n g i n e e r i n g , P r o c u r e m e n t ,

Construction), operation

19


INDUSTRY NEWS

South Korea: TotalEnergies Signs LNG Long-Term

Sale Contract with Hanwha Corporation

A

gainst the backdrop of World Gas

Conference 2022, TotalEnergies

announces the signing of a Sale and

Purchase Agreement (SPA) with the Korea’s

Hanwha Energy Corporation for the supply

of 600,000 metric tons of liquefied natural

gas (LNG) per year over 15 years, starting in

2024.

The LNG will be sourced from TotalEnergies’

global LNG portfolio, delivered to the

Tongyeong regasification terminal in South

Korea, and then used to supply Hanwha &

HDC’s greenfield 1 GW power plant

currently under construction next to the

terminal.

“We are pleased to extend our longstanding

cooperation with Hanwha, with

whom we are already partnering on the

Daesan petrochemical site, and in the

United States for the development of 1.6

GW of renewables. With this new contract,

TotalEnergies increases its natural gas

shipments to South Korea, the world’s third

largest importer of LNG in 2021. Our

Company is keen to support the country’s

switch away from coal for power generation,

with both LNG supplies and renewables

projects, such as our significant “Bada” 2

GW offshore wind project,” said Stéphane

Michel, President Gas, Renewables & Power

at TotalEnergies.

“It is significant that we have secured

business stability by signing a long-term

contract with our long-lasting partner

TotalEnergies, even though the volatility of

the LNG market has increased more than

ever due to the recent unstable

international situation. It will serve as a

great foundation for our Tongyeong project,

and I think the success of the Tongyeong

project will have a great impact on our

future LNG businesses. Eventually in the

long term, the company will grow steadily

with a business portfolio of solar power, ESS,

and LNG,” said Jung In Sub, Chief Executive

Officer of Hanwha Energy Corporation.

TotalEnergies is the world’s third-largest

low-carbon LNG company, with a global

market share of around 10% and a global

portfolio of nearly 50 Mt/y by 2025 thanks

to its interests in liquefaction plants in all

geographies. The Company benefits from an

integrated position across the LNG value

chain, including production, transportation,

trading, and LNG bunkering. TotalEnergies

ambition is to increase the share of natural

gas in its sales mix to 50% by 2030, reduce

the gas value chain’s carbon emissions,

eliminate methane emissions, and work

with local partners to promote the

transition from coal to natural gas.

TotalEnergies is a global multi-energy

company that produces and markets

energies: oil and biofuels, natural gas and

green gases, renewables and electricity. Our

more than 100,000 employees are

committed to energy that is ever more

affordable, cleaner, more reliable and

accessible to as many people as possible.

Active in more than 130 countries,

To t a l E n e r g i e s p u t s s u s t a i n a b l e

development in all its dimensions at the

heart of its projects and operations to

contribute to the well-being of people.

TotalEnergies have been active in South

Korea for more than 30 years, operating

mainly in petrochemicals, the retail sector

and the sale of liquefied natural gas. The

company also lead community outreach

initiatives in the country to promote culture,

community support and road safety.

In South Korea, TotalEnergies own a 50%

interest in a joint venture with Green

Investment Group to develop a portfolio of

five floating offshore windfarm projects

with a combined potential capacity of over 2

GW.

TotalEnergies sell liquefied natural gas

(LNG) to Kogas (Korea's national natural gas

company) sourced from:

The company's production in Australia

(GLNG) and Oman (Oman LNG);

Train 3 at the Sabine Pass gas terminal in

Louisiana, USA, under a 20-year purchase

agreement.

More so, TotalEnergies own a 50% stake in

Hanwha Total Petrochemicals, the joint

venture that operates the Daesan refining

and petrochemicals complex, whose

products we market in the country. The

complex is ideally located on South Korea's

west coast, 400 kilometers from China, the

main importer of its products.

TotalEnergies are active through its whollyowned

affiliate Hutchinson, based in Seoul,

which owns two plants in the country.

Hutchinson is the leader in elastomers

processing and specializes in sealing, fluids

management, anti-vibration systems, and

materials and structures (acoustic and

thermal insulation).

Lastly, through its joint venture S-Oil

Lubricants Co. Ltd (50%), TotalEnergies

operate a lubricant blending plant in Ulsan.

21


INDUSTRY NEWS

Patrick Pouyanné

TotalEnergies Implements a

Worldwide Drone-Based Emissions

Detection Campaign

As part of its commitment to

identify, quantify and reduce

methane emissions linked to its

operations, TotalEnergies has launched a

worldwide drone-based emissions

detection and quantification campaign

across all its upstream Oil & Gas operated

sites. The campaign uses AUSEA

technology developed by TotalEnergies,

the French National Research Center for

Scientific Research (CNRS) and University

of Reims Champagne Ardenne.

Since 2017, TotalEnergies has been

working with its partners to develop

g re e n h o u s e ga s q u a n t i f i c a t i o n

technology known as AUSEA (for

Airborne Ultralight Spectrometer For

Environmental Applications). AUSEA

consists of a miniature dual sensor

mounted on a drone, capable of

detecting methane and carbon dioxide

emissions, while at the same time

identifying their source. Measurements

can be taken at all types of industrial

facility, whether onshore or offshore,

using this technology. It supplements

measurements taken using traditional

techniques such as infrared cameras,

ground sensors and satellite.

After being successfully tested at sites in

Nigeria, Italy, the Republic of the Congo

and the Netherlands, AUSEA technology

is being rolled out this year at all

upstream Oil & Gas sites operated by

TotalEnergies.

The campaign began in early March for

African offshore sites, has now been launched

in South America and will reach Europe this

summer. The campaign is an important step

towards achieving a reduction of 50% in

methane emissions at Company operated

sites by 2025 and of 80% by 2030 (targets in

relation to 2020).

“TotalEnergies is committed to moving

towards Zero Methane. Considered to be

currently the most accurate technology in the

world to detect and measure methane

emissions, AUSEA will help us to refine our

emissions calculations, and to take stronger

measures to reduce our emissions even

further in order to achieve the targets we

have set”, said Namita Shah, President,

OneTech of TotalEnergies.

The AUSEA technology is also being further

developed to move from a manual to an

autonomous mode in order to increase the

f r e q u e n c y o f m e t h a n e e m i s s i o n

measurements. Its deployment will also be

extended to the Company's other activities,

particularly at its refineries.

Reducing methane emissions: a priority for

TotalEnergies

The Company already halved its methane

emissions at its operated sites between 2010

and 2020 by targeting all sources (reductions

in flaring, venting, fugitive emissions, etc.)

and introducing stricter design criteria for

new facilities.

In line with the Glasgow agreements, the

Company is setting new targets for its

operated methane emissions for the current

decade: reduction from 2020 levels of 50% by

2025 and 80% by 2030. The Company has

also undertaken to keep methane intensity

below 0.1% across its operated gas facilities.

The Company is also enhancing its reporting

as part of OGMP 2.0, the second phase of the

United Nations Environment Programme’s Oil

& Gas Methane Partnership. OGMP 2.0

outlines a reporting framework that

encompasses the entire gas value chain and

non-operated scope, including a breakdown

of emissions by source, information on

inventory methodologies and the use of

airborne measurement campaigns. In 2021,

TotalEnergies was awarded Gold Standard

status. The Company is also a signatory of the

Methane Guiding Principles.

TotalEnergies is a global multi-energy

company that produces and markets

energies: oil and biofuels, natural gas and

green gases, renewables and electricity. Our

more than 100,000 employees are committed

to energy that is ever more affordable,

cleaner, more reliable and accessible to as

many people as possible. Active in more than

130 countries, TotalEnergies puts sustainable

development in all its dimensions at the heart

of its projects and operations to contribute to

the well-being of people.

As a broad-energy company, TotalEnergies

provides people around the world with the

energy they need to support their socioeconomic

development in a sustainable world

and ensure their well-being. The company

operate in accordance with the Paris

Agreement, with a view to achieving,

together with society as a whole, carbon

neutrality in all its global activities by 2050.

57 22

18 09


06

INDUSTRY NEWS

Sensirion inside: Temperature

and humidity monitor THEye

The Swiss company FiveCo launches

compact data loggers under its new

brand THEye. These monitor

temperature and humidity of the

environment for various applications such

as the transportation of perishable goods

or precious objects. For accurate results,

they rely on Sensirion’s temperature and

humidity sensors.

What do the monitoring of cold chains for

food and pharmaceuticals and the

transport of valuable objects such as ebony

or paintings have in common with the

monitoring of laboratory environments,

wine cellars and greenhouses? The answer

is as simple as it is important: ambient

temperature and humidity must always be

controlled. To ensure close monitoring,

FiveCo has now developed THEye TH-2.

The device can monitor the temperature

and humidity of its environment with a

tunable measurement frequency. The

THEye smartphone application stores all

data on a secure server and allows it to be

accessed remotely. That way, the user has

complete control over his data. The IP68

rating proves that THEye is dust-proof and

can be fully submersed. Thus, it is resistant

to its environment. On top of that, the

device impresses with an autonomy of up

to 8 years.

The entire solution is built into a compact

device measuring only 31.8 x 38 x 11.5 mm

– roughly the size of a bottled water cap.

Available in two versions with different

temperature accuracy, THEye's ingenious

integration of temperature and humidity

sensors makes all units extremely sensitive

to environmental fluctuations.

“Sensirion is proud to support and partner

with innovative companies, generating

transparency and traceability around the

world. THEye is a perfect example of how

our temperature and humidity sensors can

be used to make the world smarter and

more efficient.” states Matthias Scharfe,

Product Manager Humidity at Sensirion.

For accurate results, FiveCo relies on

Sensirion’s temperature and humidity

sensor series SHT3x.

The sensor series combines multiple

functions and various interfaces (I²C, analog

voltage output) with an applicationfriendly,

very wide operating voltage range

(2.15 to 5.5 V). Both versions of THEye are

equipped with sensors of this series. For the

THEye TH-2 ISO specifically, FiveCo

developers used the SHT33-DIS, whose

ISO17025 certification allows the logger to

be cold chain compliant.

“This partnership between our two Swiss

companies granted the opportunity to

develop a reliable, compact and easy-to-use

product which we are most proud of” says

Antoine Lorotte, CEO of FiveCo.

About Sensirion

Sensirion is one of the world’s leading

developers and manufacturers of sensors

and sensor solutions that improve

efficiency, health, safety, and comfort.

Founded in 1998, Sensirion now employs

around 1’ 000 people at its headquarters in

Stäfa, Switzerland and in numerous

international subsidiaries. Sensirion sensors

can be used to measure a wide range of

environmental parameters and flow rates

precisely and reliably. The company’s aim is

to make the world smarter withpioneering

sensor technology. As a pioneer in

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23


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INDUSTRY NEWS

Venture, ExxonMobil Signs New Long-Term LNG SPAs

Venture Global LNG announced the

execution of two new long-term

Sales and Purchase Agreements

(SPAs) with ExxonMobil LNG Asia Pacific

(EMLAP) for the sale of 2 million tonnes per

annum (MTPA) of liquefied natural gas

(LNG). Under the agreements, the

ExxonMobil affiliate will purchase 1 MTPA

from the Plaquemines LNG facility

(Plaquemines) as well as 1 MTPA from the

CP2 LNG facility (CP2). This is the second

supply agreement for CP2, which is

expected to commence construction in

2023. Both facilities will replicate the same

successful innovative design seen in

operation today at Calcasieu Pass, where

speed of execution resulted in the

production of first LNG only 29 months after

FID.

"Venture Global is deeply honored that

ExxonMobil has chosen to collaborate with

our company across both of our next

projects: Plaquemines and CP2" said Mike

Sabel, CEO of Venture Global LNG. "As a

global LNG leader, ExxonMobil's support for

Ve nture G l o b a l ' s i n n o vation a n d

engineering execution is a defining moment

for our combined teams and the wider LNG

market. Venture Global looks forward to

many years of collaboration between our

companies to bring lower carbon energy to

the world."

“LNG has an important role to play in helping

society reduce emissions from industrial

sectors," said Peter Clarke, senior vice

president of LNG for the ExxonMobil

Upstream Company. "We look forward to

working with Venture Global as we continue

to grow ExxonMobil's LNG portfolio and

progress our plans to reliably deliver natural

gas from the U.S. Gulf Coast to global

markets.”

Venture Global is a long-term, low-cost

provider of U.S. LNG sourced from resource

rich North American natural gas basins.

Venture Global's first facility, Calcasieu Pass,

commenced producing LNG in January

2022. The company is also constructing or

developing an additional 60 MTPA of

production capacity in Louisiana to provide

clean, affordable energy to the world. The

company is developing Carbon Capture and

Sequestration (CCS) projects at each of its

LNG facilities.

QatarEnergy Increases its LNG

Production Capacity to 110MTPA

Ma r k i n g t h e f i n a l m a j o r

milestone to deliver its North

Field East (NFE) LNG Expansion

Project to boost Qatar ’s LNG

production capacity to 110 million

tons per annum (MTPA), QatarEnergy

has awarded a major engineering,

procurement, and construction (EPC)

contract for the North Field Expansion

Project. A joint venture between

Técnicas Reunidas S.A. (TR) and Wison

Engineering (Wison) has been

selected as the EPC contractor and

was awarded a lump-sum contract for

the expansion of the sulfur handling,

storage, and loading facilities within

Ras Laffan Industrial City.

These facilities will support the NFE’s

four new LNG trains, which are

scheduled to start by year-end 2025.

The contract will also include an

option for further expansion to

support sulfur production for the two

additional LNG trains of the North

Field South (NFS) project, and

infrastructure to support future

additional LNG trains.

Commenting on this occasion, His

Excellency Mr. Saad Sherida Al-Kaabi,

the Minister of State for Energy

Affairs, the President and CEO of

QatarEnergy said: “The award of this EPC

contract is the culmination of our efforts

to implement the NFE project, the largest

of its kind in the history of LNG industry, as

part of our journey for the sustainable

development of our massive natural gas

resources, while maintaining our position

as the world’s largest, safest and most

reliable LNG producer.

The contract with the TR-Wison joint

venture includes options for the NFS

project as well as any future requirements

for the handling, storage and loading of

sulfur. We look forward to working

together to deliver this important project

in a safe, timely, and successful manner.”

In delivering the contract, the TR-Wison

joint venture will manage the detailed

engineering work from Qatar, leveraging

the country ’s growing technical

capabilities for the development of major

projects.

Sulfur produced as a by-product of the gas

treatment process required prior to the

production of LNG is used in the

production of fertilizers and as a base

material for intermediary chemicals used

in the manufacturing of industrial and

household products.

25


INDUSTRY NEWS

QatarEnergy Consortium Moves Into

Brazil, Signs PSA For Sépia Oil Field

AQatarEnergy consortium has

entered into a production sharing

agreement with the Brazilian

government related to surplus volume

rights of the world class Sépia oil field in

Brazil.

The Production Sharing Contract, and other

key agreements, were signed in Brasilia,

during a special ceremony hosted by the

Brazilian Ministry of Mines and Energy.

Pursuant to the signed agreements,

QatarEnergy will hold a 21% interest along

with its consortium partners Petrobras

(30% and Operator), TotalEnergies (28%),

and Petronas (21%).

This signing follows the award of the Sépia

surplus volume rights to the consortium at

the conclusion of the second transfer of

rights surplus bidding round on 17

December 2021, held by Brazil’s National

Agency of Petroleum, Natural Gas and

Biofuels (ANP).

In remarks on this occasion, His Excellency

Mr. Saad Sherida Al-Kaabi, Minister of State

for Energy Affairs, President and CEO of

QatarEnergy, said "We are delighted to

reach this important milestone and close

Sepia’s key definitive agreements. We look

forward to working with our partners

Petrobras, TotalEnergies and Petronas to

progress the next phase of development. I

would like to express my sincere thanks and

gratitude to His Excellency Mr. Bento

Albuquerque, the Minister of Mines and

Energy of Brazil, for his support and to all

teams form our consortium partners for

their hard work and dedication over the

past few months, which allowed us to

celebrate this important landmark of the

start of a new long-term partnership.”

Located in water depths of about 2,000

meters off the coast of Rio de Janeiro in the

prolific Santos Basin, Sépia is a multibillionbarrel,

pre-salt oil field. Production from the

Sépia field started in August 2021 through a

dedicated floating production, storage, and

offloading unit (FPSO) and plans are

underway to increase the overall

production capacity with a second FPSO.

This deal further establishes QatarEnergy as

one of the leading upstream players in

Brazil, where it holds working interests in

numerous exploration and production

assets.

Exploration, appraisal and development

operations

During the last 25 years, QatarEnergy has

signed Exploration and Production Sharing

Agreements (EPSA) and Development and

Production Sharing Agreements (DPSA)

with a number of major international oil and

g a s c o m p a n i e s , i n c l u d i n g E l f

Aquitaine/Total, Anadarko Qatar, Maersk

Oil Qatar, Occidental Petroleum Qatar,

Qatar Petroleum Development, Talisman

Energy Qatar, GDF Suez, China National

Offshore Oil Corp (CNOOC), Qatar Shell,

Exxon Mobil and Dolphin Energy.

These agreements have boosted Qatar's oil

and gas reserves through new discoveries

and the development of existing fields.

Some of the fields which were discovered

and/or developed through these

agreements are Idd El Shargi Dome (North

and South), Al Shaheen Field and Al Khaleej

Field, as well as, Al Karara and A Structures.

Operational responsibility is a fundamental

part of the philosophy of QatarEnergy,

driving continuous improvement across all

our activities. The company is committed to

achieving world-class safety performance,

with an incident-free, secure, safe and

healthy environment for our employees,

stakeholders, partners, contractors and the

communities where we operate. We care

for our people and see occupational health

and safety as a priority for everyone.

QatarEnergy is committed to leveraging the

benefit of past experiences, international

best practices, and the standards set by the

International Association of Oil and Gas

Producers to ensure world-class operations

and safety standards.

26


INDUSTRY NEWS

Cheniere's Corpus Christi and ARC Resources Sign

Long-Term IPM Gas Supply Agreement

Cheniere Energy, Inc. has officially

announced that its subsidiary,

Corpus Christi Liquefaction

Stage III, LLC, has entered into a longterm

Integrated Production Marketing

(IPM) gas supply agreement with ARC

Resources U.S. Corp, a subsidiary of

ARC Resources, Limited, a leading

natural gas producer in Canada.

Under the IPM agreement, ARC U.S. has

agreed to sell 140,000 MMBtu per day

of natural gas to Corpus Christi Stage III

for a term of 15 years, commencing

with commercial operations of Train 7

of the Corpus Christi Stage III Project.

The LNG associated with this gas

supply, approximately 0.85 million

tonnes per annum (“mtpa”), will be

marketed by Cheniere. Cheniere will

pay ARC U.S. an LNG-linked price for its

gas, based on the Platts Japan Korea

Marker (JKM), after deductions for

fixed LNG shipping costs and a fixed

liquefaction fee. ARC Resources, Ltd.

will act as guarantor of the IPM

agreement on behalf of ARC U.S. The

IPM agreement is subject to Corpus

Christi Stage III making a positive final

investment decision to construct the

Corpus Christi Stage III Project.

“We are pleased to enter into this long-term

IPM agreement with one of Canada’s largest

natural gas producers, enabling Canadian

natural gas to reach international markets,”

said Jack Fusco, Cheniere’s President and CEO.

“ T h i s commerc i a l a g re e m e nt f u r t h e r

demonstrates Cheniere’s ability to create

collaborative, innovative tailored solutions that

meet the needs of our customers. This IPM

agreement with ARC U.S. is expected to provide

additional support to the Corpus Christi Stage III

Project, which we expect to reach FID this

summer.”

The Corpus Christi Stage III Project is being

developed to include up to seven midscale

liquefaction trains with a total expected

nominal production capacity of over 10 mtpa.

Cheniere Energy, Inc. is the leading producer

and exporter of liquefied natural gas (LNG) in

the United States, reliably providing a clean,

secure, and affordable solution to the growing

global need for natural gas. Cheniere is a fullservice

LNG provider, with capabilities that

include gas procurement and transportation,

liquefaction, vessel chartering, and LNG

delivery.

Cheniere has one of the largest liquefaction

platforms in the world, consisting of the

Sabine Pass and Corpus Christi liquefaction

facilities on the U.S. Gulf Coast, with total

production capacity of approximately 45

million tonnes per annum of LNG in

operation. Cheniere is also pursuing

liquefaction expansion opportunities and

other projects along the LNG value chain.

Cheniere is headquartered in Houston,

Texas, and has additional offices in London,

Singapore, Beijing, Tokyo, and Washington,

D.C.

ARC Resources Ltd. is a pure-play Montney

producer and one of Canada's largest

dividend-paying energy companies,

featuring low-cost operations and leading

ESG performance. ARC's investment-grade

credit profile is supported by commodity and

geographic diversity and robust risk

management practices around all aspects of

the business.

Chevron Launches CCS Project in San Joaquin Valley

Chevron U.S.A. Inc., through its

Chevron New Energies division, has

launched a carbon capture and storage

(CCS) project aimed at reducing the carbon

intensity of its operations in San Joaquin Valley,

California. Chevron aims to reduce its carbon

intensity - the amount of carbon dioxide (CO2)

emitted per unit of energy produced - by

installing CO2 post-combustion capture

equipment, capturing the CO2 and then safely

storing it thousands of feet underground. This

CCS initiative would begin at Chevron’s Kern

River Eastridge cogeneration plant in Kern

County, California.

“At Chevron, we believe the future of energy is

lower carbon. Reducing the carbon intensity of

the energy people rely on day-in and day-out is

well-aligned with the ambitions of the Paris

Agreement,” said Chris Powers, vice president

of Carbon Capture, Utilization, and Storage

(CCUS) for Chevron New Energies. “We are

excited about the opportunity to collaborate

and progress this CCS initiative in San Joaquin

Valley, a region where we have lived and

worked for over a century.”

Chevron has applied to obtain a Conditional Use

Permit with the Planning and Natural Resources

Department of Kern County and will continue to

work with appropriate regulators throughout

the process.

In addition to the Eastridge cogeneration

project, Chevron is currently evaluating and

deploying multiple carbon capture technology

demonstrations to mature more efficient and

cost-effective capture solutions, potentially

enabling future projects, not only for Chevron,

but for other industries.

“As Chevron advances to a lower carbon future,

we’re identifying ways to advance our

operations as well, so we can continue to

provide local jobs, support the local economy,

and generate local government revenue that

supports critical community services,” said

Molly Laegeler, vice president, San Joaquin

Valley (SJV), Chevron. “We are excited about

this Chevron New Energies project and

fostering continued collaboration with local

regulators throughout this process, not only to

position the region to benefit from these lower

carbon solutions, but that we continue to

protect people and the environment. We

believe this project has the potential to benefit

the region on many levels and that Kern County

is an ideal location for carbon capture and

storage.”

An August 2020 report by the Lawrence

Livermore National Laboratory that highlighted

opportunities for California to become carbon

neutral noted, “there are various options for

geologic storage sites in the state, but we have

identified the most promising first candidates in

San Joaquin County and in Kern County,” due to

the regions’ geologic and subsurface

characteristics, as well as the existing oil and

natural gas production.1

Chevron is also actively exploring additional

opportunities to lower the carbon intensity of

its SJV operations, including the blending of

hydrogen with natural gas in combustion, and

the potential use of other emerging lower

carbon technologies, such as geothermal.

27


INDUSTRY NEWS

Eni Publishes “Eni for 2021” that Describes the Main

Sustainability Results and Targets Reached by the

Company

E

ni has published its “Eni for 2021

- A just transition”, the 16th

voluntary sustainability report

t h a t o u t l i n e s t h e c o m p a n y ' s

contribution and objectives for a just

transition, with a view to sharing social

and economic results on its path to

carbon neutrality by 2050.

"As Eni, we strongly feel the

responsibility to contribute to giving

access to energy to all, supporting the

development of the countries where

we are present, and contributing to the

achievement of the highest ambitions

of the Paris Agreement. This

commitment is stronger today, in light

of the war in Ukraine, at a historical

moment when it is necessary to be

even more inclusive and not divisive,

seeking the common good and

increasing efforts to ensure Europe’s

energy security, while accelerating the

decarbonisation process", said Claudio

Descalzi, Eni’s Chief Executive Officer.

These messages are addressed in detail

in the report, which is completed by the

volumes “Eni for 2021 - Carbon

neutrality by 2050”, focused on Eni's

strategies and main climate targets,

and “Eni for 2021 - Sustainability

performance”, which provides an

o v e r v i e w o f t h e c o m p a n y ' s

environmental, social and governance

indicators.

Claudio Descalzi, Eni’s

Chief Executive Ofcer

Specifically, with regards to the 2050 carbon

n e u t r a l i t y s t r a t e g y, E n i f u r t h e r

strengthened its objectives, announcing a

35% reduction in net scope 1, 2 and 3

emissions by 2030 and 80% by 2040 with

respect to 2018 levels (compared to the -

25% and -65% targets in the previous plan).

For net scope 1 and 2 emissions, the

company will achieve -40% by 2025

(compared to 2018 levels) and net zero

emissions by 2035, five years ahead of the

previous plan. It will also increase the share

of investments dedicated to new energy

solutions, targeting 30% by 2025, doubling

to 60% by 2030 and reaching 80% by 2040.

In achieving decarbonisation goals,

increasing attention is paid to the concept of

"just transition", namely managing the

impact of the energy transformation on

people, starting with direct and indirect

workers and including communities and

customers. The report provides an overview

of the projects and initiatives adopted by Eni

to ensure a fair transition. These are part of

the constant evolution of the company’s

business activities, which include the

conversion of refineries into biorefineries,

forest conservation projects, the

development of renewables, and the

creation of agri-hubs that will provide

feedstock for biorefineries, creating jobs

and supporting the development of new

activities in the countries of presence.

Eni has also strengthened its partnerships

with international organizations for

development cooperation. The main

initiatives for the communities carried out

in 2021 include activities aimed at

improving access to water for the

population of Basra, Iraq, thanks to water

treatment plants provided by Eni, economic

diversification projects in the agricultural

sector in Angola, Congo and Nigeria, and

projects to support local and youth

e ntre p re n e u rs h i p i n E g y pt. E n i ' s

commitment to promoting education and

professional training remains central, as

showed by the initiatives in Angola, Egypt,

Iraq, Mexico and Mozambique.

Eni is a global energy company present in 69

Countries with over 31,000 people,

operating along the entire value chain. The

company mission clearly expresses Eni's

commitment to play a decisive role in the

Just Transition process to guarantee access

to efficient and sustainable energy by

achieving the goal of net zero emissions by

2050, with a view to sharing social and

economic benefits with workers, the value

chain, communities and customers in an

inclusive, transparent and socially equitable

manner, taking into consideration the

different level of development of the

Countries in which it operates, minimising

existing inequalities. The company’s

business is constantly focused on

operational excellence. This translates into

an ongoing commitment to valuing people,

safeguarding both the health and safety of

people, asset integrity, protecting the

environment, integrity & respect for human

rights, resilience & diversification of

activities and ensuring sound financial

discipline.

28


INDUSTRY NEWS

Mitsubishi Corporation to Invest $100 million in

Climate Technologies

Mitsubishi Corporation (MC) has

officially announced its decision to

invest in Breakthrough Energy

Catalyst (Catalyst), a program dedicated to

a c c e l e r a t i n g i n n o v a t i v e c l i m a t e

technologies. Mitsubishi plans to invest

100 million USD in Catalyst, and in doing so

w i l l b e c o m e t h e f i r s t c o m p a n y

headquartered in Asia to make a

commitment of this scale to the fund.

Catalyst is a first-of-its-kind model that

brings together companies, governments,

and private philanthropy to accelerate the

adoption of critical, next generation

climate technologies. Catalyst is part of

Breakthrough Energy, a network of

initiatives founded by Bill Gates in 2015

dedicated to funding, developing,

commercializing, and scaling the

technologies that will be necessary to avoid

a climate disaster.

By making targeted investments in climate

technologies that have proven their

p o t e n t i a l t h ro u g h re s e a rc h a n d

development, Catalyst aims to speed up

their large-scale commercialization. This

will significantly decrease the price of new

clean products, increase their availability in

the market, and demonstrate how to

f i n a n c e t h e i n f r a s t r u c t u r e o f

decarbonization at scale.

Having unveiled its own roadmap to carbon

neutrality in October 2021, MC has publicly

disclosed both its greenhouse-gas

emissions reduction targets and energytransformation

(EX) investment guidelines.

As a private entity with ownership in

resource, energy and many other

businesses, MC is fully committed to doing

its part in the worldwide push to

decarbonize.

Renewables, hydrogen, ammonia and

methanation are just some of the nextgeneration

energy initiatives that MC is now

examining as future earnings pillars, but MC

also understands the challenges to

achieving a net-zero world. Swift

application of new technologies and

innovations will be crucial to meeting those

challenges.

Catalyst creates a framework in which

Breakthrough Energy and its public and

private sector partners including

g o v e r n m e n t s , c o r p o ra t i o n s , a n d

philanthropic organizations, will work

together to commercialize high-impact

decarbonization technologies through

measures such as equity investment, grant

funding and offtake agreements. These

technologies will underpin a zero-carbon

economy but are currently more expensive

than their existing fossil-fuel emitting

counterparts. The difference between these

costs is what is now referred to as “Green

Premium.”

The current Catalyst focus areas are (1)

C l e a n H y d r o g e n ( a n d r e l a t e d

infrastructure), (2) Long-duration Energy

Storage (LDES), (3) Sustainable Aviation Fuel

(SAF), and (4) Direct Air Capture (DAC). In

future, the Catalyst program and its

partners may expand its focus to include

other hard-to-abate sectors. MC also

considers these technologies vital to its own

EX strategies and net-zero roadmap.

By participating in this program, MC is

demonstrating a commitment to growing

climate technologies and further reducing

our carbon footprint in ways that will not

compromise our quality of life.

At MC we are proud of the wealth of

expertise and networks that we have built

up in Japan and throughout Asia. We remain

dedicated to optimizing those assets so that

we can assist our Catalyst partners in steel,

aviation, finance, energy and other

industries. Together we will work to

enhance the program’s value and help us

transition to a carbon-neutral world.

29


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INDUSTRY NEWS

Equinor and Partners to Invest

NOK 9 billion for Gas Development


Tom Elseth (left) (Equinor), Arild Stavnem (Petoro), Gunn Gadeholt (Spirit Energy), Geir Tungesvik

(Equinor), Terje Aasland (Minister of Petroleum and Energy) and Ørjan Jentoft (Vår Energi)

Equinor and Halten East partners

Vår Energi, Spirit Energy and

Petoro have decided to invest

about NOK 9 billion in the development

of the area neighbouring to the Åsgard

field in the Norwegian Sea.

The area consists of six gas and

condensate discoveries and option on

another three prospects. The

partnership today submits the plan for

development and operation to the

Ministry of Petroleum and Energy.

estimated at almost 16 million Sm3 of oil

equivalent, or around 100 million barrels of

oil equivalent, 60 percent of which is gas

piped via Kårstø to Europe.

“Halten East is a subsea development

consisting of five subsea templates that will

be tied back to the existing infrastructure on

the Åsgard field, ensuring good resource

exploitation and high value creation, low

development costs, and low CO2

emissions,” says Randi Elisabet Hugdahl,

vice president, Åsgard operations.

Production

start-up at

Hammerfest

LNG

A

fter extensive repairs and improvement

work, Hammerfest LNG is back in

production after the fire in September

2020. The first liquified natural gas (LNG) is now

on tank at Melkøya.

“With the start-up of Hammerfest LNG, we add

further volume to the already substantial gas

deliveries from Norway. This is of great

significance in a period when predictable and

reliable supplies are highly important to many

countries and customers,” says Irene

Rummelhoff, Equinor ’s executive vice

president, Marketing, Midstream and

Processing.

Norway is an important gas supplier to Europe,

and the volumes from Hammerfest LNG

account for more than 5% of Norwegian gas

ex p o r t s . D u r i n g n o r m a l p ro d u c t i o n

Hammerfest LNG delivers around 6.5 billion

cubic metres per year, equivalent to the annual

gas demand of 6.5 million European

households.

“I would like to thank all employees, suppliers

and partners that have done a great job getting

the plant ready for safe start-up. This is a huge

and complicated task, with much of the project

work during a challenging pandemic," says

Rummelhoff.

“Gas is an important energy carrier for

Europe. Halten East utilises the existing

gas infrastructure on the Norwegian

continental shelf (NCS) and will add

important volumes that will generate

substantial value. The project is a good

example of how Equinor works with

partners and government authorities

across production licences to find smart

solutions for optimal resource

exploitation from the NCS,” says Geir

Tungesvik, Equinor’s executive vice

president, Projects, Drilling &

Procurement.

Halten East is a collective name for

several small-size discoveries and

prospects. Finding economically viable

development alternatives for each

individual project was difficult. In 2020

the licensees in the four licences

therefore agreed to develop the area as

a unit.

Recoverable reserves in Halten East are

The project is planned to be executed in two

phases. In the first phase of the

development, six wells will be drilled in the

period 2024-2025, whereas phase two is

p l a n n e d t o b e d e v e l o p e d i n

2029.Production start from the two first

wells is scheduled for 2025. Subsequently,

the wells will be put on stream as they are

completed.

Social spin-off effects in Norway

According to a spin-off study by Bodø

Science Park the national employment

effects in the development phase of Halten

East are estimated at slightly more than

3000 person-years of employment per year

over five years in the period 2022-2029.

More than 90 percent of the Halten East

investments go to suppliers resident in

Norway.

Partners: Equinor Energy AS (57.70% -

operator), Petoro AS (5.90%), Vår Energi AS

(24.60%) and Spirit Energy AS (11,80 %).

Repairs of sophisticated equipment and

compressors have been performed, in addition

to a scheduled turnaround and ordinary

maintenance. More than 22 000 components

have been checked, and 180 kilometres of

electric cables have been replaced. To minimize

infection spreading extensive infection control

measures and strict distancing rules have been

implemented. The plant is built for operation at

minus 163 degrees Celsius, and a controlled and

stepwise procedure is followed towards full

production.

The LNG tankers Arctic Voyager, Arctic Lady and

Arctic Princess are anchored up outside

Melkøya, ready to receive new cargoes from

Hammerfest LNG. Normally, it takes 4-5 days to

fill the storage tanks at the plant, before the

ships are loaded with LNG for shipping to

receiving terminals in various markets. In full

production, a ship will leave Melkøya

approximately every five days. Each ship

contains about 1 TW of energy. The partnership

includes Equinor Energy AS, Petoro AS,

TotalEnergies EP Norge AS, Neptune Energy

Norge AS, and Wintershall Dea Norge AS.

Equinor is the operator of Hammerfest.

31


INDUSTRY NEWS

Oman LNG Signs Two Pivotal Agreements to Boost R&D,

Capacity Building

In response to its consistent drive to

s p e a r h e a d C o r p o r a t e S o c i a l

Responsibility efforts in the Sultanate of

Oman, Oman LNG inked two pivotal

agreements with the Ministry of Education. The

agreements encapsulate financing two

fundamental projects, aimed at boosting

research and innovation concepts and capacity

building in the country. The first agreement

involves financing the equipping of the

Scientific Exploration Centre in North

Sharqiyah’s Renewable Energy Education

Centre. Through this Centre, Oman LNG aims at

raising awareness on the importance of

renewable sources of energy like water, wind,

hydrogen and sun, which are considered

environmentally friendly.

Amongst the other objectives of this agreement

is the focus on renewable energy, and its

pioneering role in creating a great value to the

community through creating innovative

entrepreneurship opportunities; while

encouraging student’s participation in

international and regional competitions. The

second fund includes financing a training

programme targeting more than 320 students

from a number of Science and Innovation

Centres from different schools in North Batinah,

South Batinah, South Sharqiyah and Al Dhahira

Governorates.

The programme focuses on generating creative

and innovative ideas by covering different

scopes including; web designs, smart

technology, and applications development. To

further ensure its sustainability and knowledgetransfer,

the programme will also involve

training teachers in these fields, where they will

ultimately transfer such expertise and skills to

the students.

The agreements signed reflect the company’s

bold commitment to support education and

innovation, while align with Oman 2040 Vision

on capacity building. Additionally, these

agreements further motivate younger

generations to engage in positive competitions

and knowledge sharing.

Dr. Amor Al Matani, the CEO of Oman LNG

Development Foundation, said: “Since

inception, Oman LNG has shown a great interest

in supporting education and innovation in

Oman. We strive to ensure the provision of highend

facilities and inclusive programmes across

the nation to ensure all generations are

equipped with the necessary knowledge and

skills needed to face the ever evolving and

changing world of today. We are pleased to

collaborate again with the Ministry of Education

and embark on its journey towards boosting

research and innovation in the country, while

also focusing on the importance of renewables.”

TotalEnergies and New Hope

Energy partner on U.S. Advanced

Recycling Project

TotalEnergies and New Hope

E n e r g y h a s s i g n e d a

commercial agreement under

which New Hope Energy will build an

advanced recycling plant in Texas to

transform end-of-life plastic waste

into a recycled feedstock that

TotalEnergies will partly purchase and

convert into virgin-quality polymers,

which can be used for food-grade

packaging.

The New Hope Energy plant is

expected to start production in 2025

and will use a patented pyrolysis

technology that was developed in

partnership with Lummus Technology

to process and convert more than

310,000 tons per year of mixed plastic

waste that would otherwise be

destined for landfill or incineration.

TotalEnergies will use 100,000 tons of

Recycled Polymer Feedstock (RPF) in

its Texas-based production units to

manufacture high-quality polymers

suitable for food-grade applications

such as flexible and rigid food

packaging containers.

“We are pleased to partner with New Hope

Energy, which offers a promising technology

and the ability to scale. This new project is

another concrete and significant step

TotalEnergies is taking to address the

challenge of plastic recycling and meet our

goal of producing 30% circular polymers by

2030,” said Valérie Goff, Senior Vice

President, Polymers at TotalEnergies.

“TotalEnergies understands the need to

increase recycling in the U.S. and abroad,

and their 2030 renewable polymer goal is

a testament of their commitment to the

circular economy,” said Rusty Combs,

Chief Executive Officer of New Hope

Energy. “Our partnership with Lummus

has allowed us to provide the scale and

reliability necessary to support them in

this mission.”

“ The ability to effectively and

economically convert waste plastics to

pyrolysis oil for further use is a critical step

in achieving a true circular economy,” said

Leon de Bruyn, President and Chief

Executive Officer of Lummus Technology.

“Supporting TotalEnergies in reaching

their sustainability goals is exactly what

our integrated processing solutions are

designed to do.”

32


INDUSTRY NEWS

EMRC and Woodside Collaborate on Innovative Carbon

Re-Use Pilot Project

The Eastern Metropolitan Regional

Council (EMRC) and Woodside are

collaborating on a carbon-toproducts

pilot project that proposes to

recycle greenhouse gases into useful

products.

The two parties have agreed a term sheet

setting out the terms of a proposed

option to lease land. The option to lease

land will provide for Woodside’s use of

EMRC’s Red Hill Waste Management Eco

Park for a proposed pilot Carbon Capture

and Utilisation (CCU) facility, and for the

supply of landfill gas by EMRC to

Woodside.

The proposed CCU facility would convert

greenhouse gases, such as methane and

carbon dioxide, into value-added

ethanol, using technologies developed

by US-based companies ReCarbon and

L a n z a Te c h . T h e p i l o t a i m s t o

demonstrate that the integration of

these technologies has the potential to

contribute to decarbonisation and a

circular carbon economy.

Following execution of the option to

lease, exercise of the option to lease and

construction of the CCU facility is subject

to a final investment decision (FID) by

Woodside targeted to occur in the

second half of 2022, with a targeted

completion and commissioning date in

the second half of 2024.

EMRC Chairman Cr Mel Congerton said:

“Woodside1 and the EMRC are today

jointly announcing an exciting

development which aims to radically change

the way we approach our aspirations of net

zero emissions. It is a major step forward on

the

journey towards sustainable protection of the

environment we all share.

“This collaboration between a regional local

government and a global energy company

supports the United Nations’ Sustainability

Development Goal 17 – ‘To strengthen the

means of implementation and revitalize

partnerships for sustainable development,’”

he said.

EMRC CEO Marcus Geisler expressed his

excitement at the development and added:

“This project has the potential to shift the dial

on the future treatment of greenhouse gases

as a resource, rather than a challenge. It will

be these kinds of powerful collaborations and

innovative decarbonisation initiatives that

aim to deliver significant environmental and

social benefits to Perth’s Eastern Region,

Western Australia and the world.

“We’re very proud to be at the forefront of

this ‘carbon to products’ opportunity with

Woodside, rethinking and realising the full

potential and value of otherwise wasted

resources. This project is another example of

EMRC’s arsenal of initiatives to move towards

Net Zero,” he said.

Woodside CEO Meg O’Neill welcomed the

collaboration with EMRC and the shared drive

to explore the potential of CCU

“Woodside believes CCU is an emerging field

as customers seek lower-carbon solutions.

“Woodside’s climate strategy has two key

elements: reducing our net equity Scope 1 and 2

greenhouse gas emissions, and investing in the

products and services that our customers need as

they too reduce their emissions.

“CCU has the potential to contribute to both

elements of our climate strategy.

“To have a pilot CCU facility right here in Western

Australia, where Woodside has pioneered other

technologies, is also very exciting,” she said.

The EMRC provides a broad range of services

across the region including waste management

and education, resource recovery, natural and

urban environmental management and regional

development. Working in partnership with its

member Councils and other stakeholders, the

EMRC delivers local and regional scale projects

across each of these areas for the benefit of the

region.

Woodside provide energy which Australia and the

world needs to heat homes, keep lights on and

enable industry. The company have a reputation

for safe and reliable operations. Our hydrocarbon

business is complemented by a growing portfolio

of hydrogen, ammonia and solar opportunities in

Australia and internationally. Our new energy

opportunities include the proposed hydrogen

and ammonia projects H2Perth and H2TAS in

Australia and the proposed hydrogen project

H2OK in North America.

The Red Hill Waste Management Facility is

operated by the Eastern Metropolitan Regional

Council on behalf of five member Councils; Town

of Bassendean, City of Bayswater, City of

Kalamunda, Shire of Mundaring, and The City of

Swan. This facility is located about 12 kilometres

north-east of Midland, on the south side of

Toodyay Road and east of the Darling escarpment.

The waste facility uses modern techniques and

principles of sanitary landfill design and

operation, including leachate collection and

methane gas capture.

33


INDUSTRY NEWS

PE T R O N A S ’ t e c h n o l o g y

c o m m e r c i a l i s a t i o n a r m ,

PETRONAS Technology Ventures

Sdn Bhd (PTVSB) has entered into a

strategic collaboration with Aerodyne

Oil and Gas Sdn Bhd, a subsidiary of

A e r o d y n e G r o u p , t o e x p l o r e

opportunities for deployment and

commercialisation of drone-based

solutions.

The collaboration marks another

significant step forward in PETRONAS’

sustainability journey. It is set to elevate

t h e a d o ption o f d ro n e - b a s e d

technology in the energy industry and

b e y o n d t o d r i v e o p e ra t i o n a l

optimisation while reducing carbon

footprint and improve worksite safety.

It is also part of PETRONAS’ efforts to

enable remote and autonomous

operations through the expansion of

robotics and digitalisation.

A Memorandum of Collaboration

(MoC) was signed on 21 April between

t h e t w o p a r t i e s . P T V S B w a s

represented by its Chief Executive

Officer, Dr. Mahpuzah Abai and PTVSB

chairman Dr. Nasir Darman, who is also

PETRONAS Chief Technology Officer,

while Aerodyne was represented by its

founder and Group Chief Executive

Officer Kamarul A. Muhamed and

Claudio Descalzi, Eni’s

Chief Executive Ofcer

Dr. Nasir Darman, PETRONAS Chief Technology Officer (fourth from right) exchanging a Memorandum of Collabora on with Kamarul A Muhamed,

Aerodyne Founder & Group CEO (fi h from le ), witnessed by Datuk Tengku Taufik, PETRONAS President & Group CEO (centre). Also on stage were

PETRONAS and Aerodyne senior management.

PETRONAS, Aerodyne to Collaborate on Deployment

and Commercialisation of Drone-Based Solutions

Director of Aerodyne Oil & Gas Karim

Hamzah.

PETRONAS President and Group Chief

E xe c u t i v e O f f i c e r, D a t u k Te n g k u

Muhammad Taufik witnessed the signing

ceremony. Also present were PETRONAS

Senior Vice President of Project Delivery

and Technology, Bacho Pilong and

PETRONAS Senior Vice President of

Corporate Strategy, Mazuin Ismail.

In his speech, Datuk Tengku Taufik said,

“PETRONAS believes the partnership with

Aerodyne is testimony to the shared vision

of both organisations to propel Malaysia to

the forefront of drone technology solutions

in the world. With PETRONAS’ in-house

technologies and Aerodyne’s expertise, we

look forward to the exciting potential dronebased

technology will bring for the energy

industry as well as other sectors,

particularly in improving safety and

reducing carbon footprint at worksites.”

In addition to a joint deep dive into

innovative drone-based solutions for

t e c h n o l o g y d e p l o y m e n t a n d

commercialisation, both companies will

also look into technology enhancement,

human capital development, establishment

of related regulations and standards, as well

as push to liberalise the usage of drone

services in Malaysian industries.

Dr. Mahpuzah said, “With this collaboration,

the sky is the limit as we are joining forces

with a homegrown drone services provider

now ranked first in the world. Combining

the expertise of two corporations so

passionate about advancing technology to

enrich lives, we will soon chart new

possibilities for drone-based solutions.”

Kamarul added, “Pooling our expertise and

resources to develop unique and creative

solutions for today’s challenges in the O&G

sector is an exciting approach and will

enable b o t h p a rties to ta p into

opportunities in Malaysia and beyond.”

The importance of drone-based technology

is exemplified by the establishment of the

PETRONAS Drone Center to facilitate

deployment. PETRONAS has successfully

demonstrated inter-platform delivery for

payloads of 5kg within 5km distance.

Through this collaboration, both parties will

also jointly explore technical and economic

viability of drone solutions with higher

payloads and longer distance to increase

logistics efficiency and speed.

34


INDUSTRY NEWS

Hyundai Motor Group Wins Multiple Awards

With Its Electric Vehicles

Hyundai Motor Group has won

multiple honors at the 2022

Autocar ‘Britain’s Best Car

Awards’. The five accolades include three

product wins: ‘Best Electric Car’ for the

EV6, ‘Best Large Car’ for Hyundai Santa

Fe, and ‘Best Affordable Driver’s Car’ for

the Hyundai i20 N, as well as individual

recognition for the Group’s Executive

Design Advisor Peter Schreyer and

Hyundai’s Global Design Head SangYup

Lee. The awards haul reaffirms the

Group’s hard-earned position as an

automotive industry leader in design and

product development.

Commenting on his award, designer

Peter Schreyer said: "It is an honor to

receive this Lifetime Achievement

Award. I have been fortunate to have

been involved in many projects over my

40+ year design career and privileged to

work with some very talented teams to

develop vehicles that have resonated

with customers the world over.”

“In 2006, I was given the opportunity to

join Kia and the freedom to conceive a

desirable design brand. It was a truly

enriching moment in my career. Thanks

to visionary leadership of the Group and

the trust they placed in me, we led the

transformation of the Hyundai Motor

Group and created a legacy the company

can build on for the future. Since then, I have

been involved in many successful programs

for the Hyundai, Kia and Genesis brands, and I

look forward to continuing my work for the

Group,” he added.

The Autocar Awards recognize the industry’s

highest achievers and, for the first time at the

event, some of the very best cars on sale in

the UK across 10 categories.

The judges voted the Hyundai Santa Fe SUV

the ‘Best Large Car’, while the turbocharged

i20 N came away with the ‘Best Affordable

Driver’s Car’ award. Kia’s first dedicated

battery electric vehicle, the EV6, was named

Autocar’s ‘Best Electric Car’, adding to the

car’s impressive collection of awards since its

launch last year.

Che Young Kim, Head of Product Division at

Hyundai Motor Group, commented:

“Winning in these highly competitive product

categories is a significant achievement for the

Group. It’s testament to the hard work that

goes into producing class-leading products,

and to the amazing individuals we have

leading and working in our design and

product development teams. The Hyundai

Santa Fe, Hyundai i20 N and Kia EV6 may be

very different cars, but the same ingenuity

and technical prowess goes into their

creation.”

On receiving his ‘Design Hero’ award,

Hyundai’s SangYup Lee said: “Looking back

through the previous winners of Autocar’s

Design Hero Award, it’s a real honor to now be

sitting alongside some of the people I

consider to be my own design heroes. Thank

you to the team at Autocar for recognizing the

work of the Hyundai Global Design Centre

with such a prestigious accolade. I gratefully

accept this award on behalf of all our

designers and engineers, who are dedicated,

talented, and endlessly creative, and who

continue to innovate our brand from all over

the world.”

Autocar is not the only independent body to

recognize these Hyundai Motor Group

products. For example, the Kia EV6 was

recently named 2022 European Car of the

Year, and the Hyundai i20 N won Top Gear’s

coveted ‘Car of The Year’ award in 2021.

Established in 1967, Hyundai Motor Company

is present in over 200 countries with more

than 120,000 employees dedicated to

tackling real-world mobility challenges

around the globe. The company is a global

enterprise that has created a value chain

based on mobility, steel, and construction, as

well as logistics, finance, IT and service. With

about 250,000 employees worldwide, the

Group's mobility brands include Hyundai, Kia,

and Genesis. Armed with creative thinking,

cooperative communication and the will to

take on any challenge, we strive to create a

better future for all.

35


INDUSTRY NEWS

PERU Seeking

Foreign, Private

Investments for

Oil, Gas E&P

Campaigns

resources. We can explore a lot in these areas

but it would take a little bit of time. The good

thing about Peru for investors is very friendly

for any investment. We don’t have many

problems with companies these days.

Speaking about the incentives for investors,

he added, "We don't have much tax rates

compared to other South American countries.

We have a great legal framework that helps us

a lot now. The problem with Peru is that we

didn’t promote much about our oil and gas

industry in the past years but we will be

promoting it going forward."

L-R: Ndubuisi Micheal Obineme, Managing Editor of The Energy Republic and

Jeancarlo Brena, Third Secretary of Embassy of Peru

"The Government of Peru is seen as a socialist.

The Government is developing a robust legal

framework and providing an enabling

environment for investors”

In a bid to strengthen the oil and

gas industry in the country, the

Government of Peru is seeking

foreign and private investors to explore

and manage efficiently its hydrocarbon

resources in an environmental and

socially responsible way.

Peru's proven oil reserves reached

349Mb (million barrels) at the end of

2019, up 4.19Mb from a year earlier and

a second annual consecutive increase

after breaking a four-year dip, according

to a report.

Speaking in an exclusive interview with

The Energy Republic's Managing Editor,

NDUBUISI MICHEAL OBINEME at the

sideline of the 28th World Gas

Conference 2022 in Daegu, South Korea,

Jeancarlo Brena, Third Secretary

Embassy of Peru in South Korea, stated

that Peru has enormous hydrocarbon

resources, but, there hasn't been enough

investment to deepen

exploration and production activities in

driving the country's oil and gas industry for

growth opportunities and economic

prosperity.

Speaking further, Brena revealed that Peru

has huge potential for gas export following its

recent discoveries, noting that the gas

reserves in the country could be greater than

Bolivia and Argentina's gas resources.

In his words, "Peru has always used

hydropower for energy generation in the past

years. Hydropower contributes about 55% to

our energy mix. But, we are trying to convert

our energy to gas because we have a lot of gas

potential.

"We have a lot of hydrocarbon resources but

not many exploration activities going on.

Though there are discoveries and the Mar de

Grau's sea is completely unexplored and we

believe that we can find oil and gas there.

"We need infrastructures to develop our gas

"We are open to any company. We are already

working with Australian, Canadian, European,

American, and Asian companies. We have a

lot of Chinese companies as well.

"We represent a great opportunity for African

companies. Africa has a lot on the Continent.

There is a lot of oil and gas in Africa too.

"We invite African companies to take a look at

the opportunities in our oil and gas industry

and see if they want to invest. Peru wants to

generate more revenues.

"Private companies are welcome and will be

very happy to work with us. Peru's oil and gas

industry is a great opportunity for anyone

who wants to invest in our country."

37


NIGERIA ENERGY, OIL & GAS

Nigeria Gas Sector Outlook:

TRENDS, CHALLENGES,

GROWTH OPPORTUNITIES

40 43

49

Temile Awards New Vessel Building

Contract to Hyundai, NSML to Boast

Nigerian LPG Market

Stakeholders Chart Policies for

Midstream, Downstream

Sectors

Nigeria’s Petroleum Ministry Announce Dates

For NIES 2023

Nigeria’s Federal Ministry of

Petroleum Resources has unveiled

plans for the 6th edition of the

Nigeria International Energy Summit (NIES

2023). The official Oil and Gas meeting of

the Federal Republic will take place in Abuja

from April 16th to 20th, 2023.

The speed of change projected in the fossil

fuels segment as the world pursues the

energy transition agenda gave rise to the

theme of NIES 2023, which is; “Global

Perspectives for a Sustainable Energy

Future”.

“NIES 2023 will put on the front burner

overarching global energy trends and

perspectives so that policymakers and

other players in the sector can more easily

understand the latest developments and

the best roadmap to drive the energy

transition”, says Mr. James Shindi,

Managing Director of Brevity Anderson, the

event producer.

In an online media broadcast, Chief Timipre

Sylva, Honourable Minister of State for

Petroleum Resources, said “NIES 2023 is

primed to be a show stopper as it will be the

valedictory edition of this administration”.

“The event will provide the platform for the

administration to present its scorecard in

the energy sector and also provide the

opportunity to offer a roadmap for the next

administration. It is, therefore, an epoch

and a must-attend event for all the

stakeholders in the industry”, Sylva added.

As a tradition, NIES 2023 will feature the

highest level of attendance by top decisionmakers,

industry leaders, and all

stakeholders from both the public and

private sectors across Africa and the global

energy community. There will be a special

dinner and other networking events with

attendee ministers from other oilproducing

countries and heads of a

government delegation from other

countries.

With the full backing of the Federal

Government of Nigeria, NIES has over the

years witnessed the highest level of

attendance by top decision-makers,

industry leaders, and all stakeholders from

both the public and private sectors.

“N.I.E.S has grown from year to year and

remains the definitive platform, not just for

Nigeria, but also for Africa to engage the

global energy community”, Shindi said.

N.I.E.S is a federal government of Nigeria

official energy industry event with the

Federal Ministry of Petroleum Resources

and all its parastatals including the Nigerian

National Petroleum Corporation (NNPC),

Nigerian Content Development and

Monitoring Board (NCDMB), Nigerian

U p s t r e a m P e t r o l e u m R e g u l a t o r y

Commission (NURPC), Nigerian Midstream

and Downstream Petroleum Regulatory

A u t h o r i t y ( N M D P R A ) , Pe t r o l e u m

Technology Development Fund (PTDF) and

Petroleum Training Institute (PTI) are joint

hosts.

38


NIGERIA OIL AND GAS

Nigeria Gas Sector Outlook:

TRENDS, CHALLENGES, GROWTH OPPORTUNITIES

Produced By: Detail Commercial Solicitors

Nigeria has immense gas resources. The

country, as of 2021, have proven gas

deposits of 206.53 trillion cubic feet,

making Nigeria the largest gas reserve holder in

Africa and one of the largest globally. These

resources are distributed between associated

and non-associated gas. Nigeria holds more

non-associated gas in its reserves than

associated gas; however, the latter accounts

for more than half of the total gas produced

every year. Despite its abundant natural gas

reserves, Nigeria’s natural gas reserves are

under utilised. The average production of

natural gas per day in 2021 stood at 7,177.53

million standard cubic feet of gas per day,

majority of which is exported as liquefied

natural gas.

Nigeria made a paradigm shift on its regulatory

framework for the gas sector by the enactment

of the Petroleum Industry Act (“PIA”) on the

16th of August 2021. Unlike the Petroleum Act,

1969 which treated gas as a by-product of oil

operation, the PIA considers natural gas as a

stand-alone resource and makes abundant

provisions that will hopefully unlock the gas

sector.

This article examines the gas sector outlook

post PIA and highlights the challenges and

opportunities.

3Gas Sector Regulatory Structures and

Outlook Post PIA: The PIA introduced new

regulatory agencies for the regulation of the

gas sector in Nigeria. In this regard, the PIA

abrogates the Department of Petroleum

Resources (“DPR”), the Petroleum Products

Pricing Regulatory Agency (“PPPRA”) and the

Petroleum Equalisation Fund (Management

Board) (“PEF”) which formerly regulated the oil

and gas sector and in lieu of these defunct

agencies created new regulators for the

petroleum industry.

Accordingly, the Nigerian Upstream Petroleum

Regulatory Commission (the “Upstream

Commission”) is designated to regulate

activities in the upstream sector of the

petroleum industry while the Nigerian

Midstream and Downstream Petroleum

Regulatory Authority (the “Authority”) is

conferred with the role of regulating the

midstream and downstream aspects of the

Nigerian petroleum industry. The PIA also

establishes NNPC Limited to assume the assets,

liabilities and responsibilities of NNPC in

relation to gas assets.

3Key Gas Sector Considerations in the PIA

In addition to creating new regulators to

regulate activities in the petroleum industry

(particularly the gas sector), the PIA provided

abundant provisions that are targeted to unlock

the gas sector. Some of these key gas sector

provisions include the following:

a. Establishment of the Midstream and

Downstream Gas Infrastructure Fund (the

“Fund”): The PIA established the Fund as a body

corporate to reside with the Authority which

will be applied as Government’s equity

investments in infrastructure projects related

to midstream and downstream gas operations.

The aim is to increase the domestic

consumption of natural gas in Nigeria in

projects which are financed in part by private

investment; reducing or eliminating gas flare

amongst others.

b. Gas Network Code: The PIA recognizes and

validates the existing National Gas

Transportation Network Code (“Network

Code”) which became effective on 10th

February 2020 empowers the Authority to

modify the Network Code or establish new

codes, following appropriate consultations with

stakeholders in midstream and downstream gas

operations. Essentially, the Network Code

prescribes the operational, contractual, and

commercial framework that would apply to

transactions between gas transporters and gas

shippers in relation to the existing and

prospective gas transportation network system

in Nigeria.

c. Gas Flaring: The PIA has upheld the

prohibition of gas flaring in existing regulations

by stating that a licensee, lessee or marginal

field operator that flares or vents natural gas,

except in the case of an emergency, pursuant to

an exemption granted by the Upstream

Commission, or as an acceptable safety practice

under established regulations commits an

offence and is liable to a fine as prescribed by

the Upstream Commission in regulations under

the PIA.

d. The Domestic Gas Delivery Obligations:

Section 110 of the PIA empowers the Upstream

Commission to by a regulation or guideline

made under the PIA to prescribe and allocate

04 40


NIGERIA OIL AND GAS

domestic gas delivery obligation among all

OML and PML holders before 1st March of

each year based on the domestic gas

demand requirements as well as to enforce

compliance of this obligation by these

lessees

3Regulatory Instruments on the

regulation of gas post PIA: On their

assumption as the new regulators for the

Nigerian petroleum Industry, the

Upstream Commission and the Authority

have issued different regulations and draft

regulations that will shape the Nigerian gas

sector going forward. These legal

instruments that apply to the gas sector

are as follows:

a. Draft Domestic Gas Delivery

Obligations Regulations: The draft

Regulations was exposed to the public by

the Upstream Commission on 9th February

2022. The objective of the draft

Regulations is to enforce and determine

the domestic gas delivery obligations that

are imposed on holders of oil mining leases

and petroleum mining leases (“Lessees”).

It is expected that following the enactment

and implementation of this regulation, the

gas sector will experience increased gas

supply to meet growing market demand.

However, until some of the challenges

bedeviling the gas sector such as

contractual structure, pricing issues and

infrastructure constraints , are resolved, it

may be difficult to achieve the objective of

this regulation.

b. Gas Pricing Regulations: The draft

Regulations was exposed to the public by

the Authority on 9th February 2022. The

objective of the draft regulations is to

regulate the marketable natural gas prices

of the strategic sectors and to identify the

unregulated markets for natural gas. The

regulations essentially define strategic

sectors as:

(I) the power sector but excluding isolated

mini-grids and off-grid generation unless

the offgrid offtaker falls under the

commercial sector as defined in the

proposed regulations;

(ii) gas based industries that utilize gas as

feedstock who are specified under the

Fourth Schedule to the PIA; and

(iii) Commercial sector which comprises of

iron and steel companies, cement

companies and energy intensive industries

(e.g aluminium) and any other company or

industry that may be added by the

Authority.

The draft Regulations provide that for the

Regulated Domestic Market, the sale of

marketable natural gas to the strategic

sectors and gas distributors will be based

on regulated prices while in the case of

Unregulated Market, the sale of Marketable

Natural Gas to the strategic sectors, Non-

Strategic Sectors, Gas Retailers and Exporters

will be based on free market basis.

It would appear that upon the enactment and

implementation of the regulations, its possible

impact on the gas sector may vary depending

on the applicable stakeholder. For instance,

from the gas producer’s perspective, supplying

gas at a regulated price may be a disincentive

for the production of gas whilst on the other

hand, the availability of cheaper gas may be an

incentive for increased industrialization in the

strategic sectors.

3Challenges in the Domestic Gas Sector

The global oil and gas industry has experienced

a gradual profitable run in the past two years

following the recline of global COVID-19

measures which has resulted in lockdowns

being relaxed, people returning to work and the

resumption of other economic activities. A very

recent contributory to the upward trend in oil

and gas prices is the Russia-Ukraine conflict.

Despite these events, the Nigerian economy

seems to have profited very little from her oil

and gas sector. Fitch Solutions, an affiliate of

global rating agency, Fitch, has predicted that

Nigeria’s weak performance in the oil and gas

sector may continue to slow down the country’s

economy in the coming years. Some challenges

currently stifling the domestic gas sector are

highlighted below.

4.1. Infrastructure

One of the major challenges to the domestic gas

economy is the dearth of gas gathering and

distribution/pipeline infrastructure which has

led to a shortfall in capacities required to

sustain a viable gas value chain.

The existing natural gas pipeline transportation

i n f r a s t r u c t u r e i n N i g e r i a a r e t h e

Alakiri–Obigbo–Ikot Abasi Pipeline (the Eastern

Network); the Escravos–Lagos Pipeline System

(the Western Network); and the upcoming

Ajaokuta–Kaduna–Kano (“AKK”) Gas Pipeline

(currently alleged to be at 73.3% completion

and billed to commence operations in 2023).

These pipelines are all owned by the Nigerian

Gas Processing and Transportation Company

(“NGPTC”), a subsidiary of the Nigerian

National Petroleum Company Limited (“NNPC

Limited”). Other than these pipelines, there

are other pockets of gas distribution pipelines

across the country particularly in the southern

part.

Collectively, the current gas pipeline

infrastructure appears to be insufficient to

sustaining the growth of domestic demand for

gas as many states and industries still lack

access to the existing gas pipeline network. A

further challenge of this insufficiency of

infrastructure is the inability to meet

international demand which would ordinarily be a

major source of foreign exchange earnings for the

sector.

In recent times, a major concern for Nigerians has

been the frequent power outages from the national

grid which were attributable to lack of gas supply to

power the plants.

Addressing the challenge to dearth of infrastructure

in the domestic gas sector with a view to enabling

the utilization of gas as feedstock to drive

production in other industries such as power

generation, cement industry, fertilizer and

petrochemical plants, glass manufacturing, steel

and iron manufacturing, and food and beverage

manufacturing and cottage industries would

invariably lead the growth of the Nigerian economy.

4.2. Funding Development of Gas Technologies

Modern technologies to facilitate gathering,

reinjection, transmission and distribution of gas in

the domestic, regional and international networks

are capital intensive and this has resulted in

insufficient participation by private investors when

the economics are not right.

Natural gas requires expansive network of

integrated pipelines and flow/compressor stations

to gather and collect scattered gas from marginal oil

production fields within dense regions such as the

Niger Delta, for onward distribution to end users.

Most local banks are unable commit funds on a

long-term basis to oil and gas infrastructural

projects. Even when banks oblige to provide funds,

the interest rate may be too high to justify the

investment.

However, with the enactment of the PIA and the

establishment of the Midstream and Downstream

Gas Infrastructure Fund, it is expected that the

additional revenue, if efficiently utilised, would

unlock the challenge of access to funding for gas

infrastructure. However, there is still a need to

unlock more private investment to fund gas

infrastructure across Nigeria.

4.3. Security

The persistent concerns over security of

infrastructure and investment in Nigeria, especially

the Niger Delta region, has been identified as a

serious obstacle to gas development.

The local militia groups target oil and gas sector

infrastructure either to divert petroleum products

or sabotagein protest of local poverty,

environmental degradation and dissatisfaction with

governmental policies.

These activities amount to a huge disincentive for

new and existing investors in Nigeria’s gas sector.

Consequently, increased insecurity and

vandalization has led to declining investment in the

petroleum industry which has continuously

witnessed the exit of International Oil Companies

(“IOCs”).

41


NIGERIA OIL AND GAS

5. Opportunities for the Domestic Gas

Sector: Despite the challenges being faced

in the domestic gas sector, there are

several opportunities open for the gas

sector players to harness Nigeria’s

endowment of gas reserves and available

growth opportunities. A few of these

opportunities are highlighted below.

5.1. Energy Transition

In the wake of the global energy transition

from fossil fuels to cleaner and renewable

sources for generating energy, the Federal

Government of Nigeria (“FGN”) has

declared the years 2021 to 2030 its

‘Decade of Gas’, expressing the FGN’s

commitment to the development of

Nigeria's gas reserves in order to

accelerate the country's economic

expansion. Natural gas has also been

declared the transition fuel for Nigeria.

As part of the FGN’s gas strategy, the NNPC

has sanctioned seven Critical Gas

Development Projects (“7CGDP”) to

deliver about 3.4 billion standard cubic

feet of gas per day. The projects, when

completed will significantly impact the

processing and transportation of gas and

domestic utilization especially to the power

sector and gas-based industries.

5.2. The Russian-Ukraine Conflict and its

Impact on the Energy Sector: The Russia and

Ukraine conflict has accentuated the crisis in

global energy with even more consequences for

natural gas. Russia is the world’s second-largest

producer of natural gas, behind the United

States, and has the world’s largest gas reserves.

Russia is the world’s largest gas exporter. In

2021 the country produced 762 billion cubic

meters (bcm) of natural gas and exported

approximately 210 bcm via pipeline. Russian

natural gas accounted for 45% of imports and

almost 40% of European Union gas demand in

2021. This share has increased in recent years,

as European domestic natural gas production

has declined.

Following Russia’s invasion of Ukraine on 24th

February 2022, natural gas prices have surged

and other energy security concerns have arisen.

Some countries have imposed economic

sanctions against importing Russian gas and are

looking towards Africa and other continents to

fill up the supply gap this creates. In April 2022

Italy struck new deals to boost natural gas

imports from Angola and the Republic of Congo

to cut energy dependence on Russia.

Following the sanctions, the shift from Russian

petroleum presents an opportunity for other

global gas giants, including Nigeria, to fill the supply

gaps which have been created. Nigeria is ranked as

the world’s 10th largest exporter of Natural Gas. In

terms of infrastructure, Algeria has an existing

pipeline, the Medgaz pipeline, which connects

Algeria to Europe (Spain), however, its reserves are

not developed thus cannot contribute to meeting

Europe’s African gas demand. The Trans-Saharan

gas pipeline (NIGAL Pipeline) from Nigeria to

Algeria, continues to raise hopes that upon

completion, it will transport up to 30 bcm of gas per

year to Algeria, connecting to the existing network

to Europe.

5.3. Divestments by International Oil Companies

and its Impact: Several factors including the

business environment, increased insecurity and the

pursuit of their energy transition strategies have led

to the recent and ongoing divestments by several

IOCs. This situation presents further opportunities

for Nigerian indigenous oil companies and

stakeholders to capitalise on the development of

her gas resources, as the assets being divested

contain significant undeveloped non-associated gas

reserves and resources.

TABLE: GAS-RICH IOC DIVESTMENTS

E S T I M A T E D G A S

O M L S ONSHORE/OFFSHORE R E S E R V E S / R E S O U R C E S

S E L L E R

( T C F )

Chevron 86 & 88 Offshore 8.2

ExxonMobil 67, 68, Offshore 13.7

70 & 104

SPDC 18 OMLs 15 onshore/3 offshore 12.4

Conclusion- Looking Forward

Nigeria has already made significant

progress in terms of recent changes in gas

legislation and policies, major ongoing gas

infrastructure projects and funding being

sourced from local and international

sources. Following the enactment of the

PIA, Nigeria is optimistically expected to

transition into a gas based industrialized

country with more value addition for

investors and the citizens alike. This would

however be dependent on concerted

efforts to resolve some of the challenges

raised above that could stimulate

investment in the sector.

In addressing the issue of funding in the gas

sector, the involvement of bilateral funds,

development banks and institutions and

infrastructure funds, in addition to innovative

and flexible capital structures that addresses

the risks, timeframes and potential rewards of

funding gas projects will remain key to

capitalising on Nigeria’s gas opportunities.

Underperforming gas infrastructure will also

need to be rehabilitated through concessions

(Public Private Partnerships) aimed at

revamping the industry to meet present global

realities.

For Nigeria to sustain the advancements

towards transitioning to cleaner energy

sources, it will be necessary to continue to

develop the country’s significant gas reserves

and resources.

The role of gas as the transition fuel is a reality in

terms of moving Nigeria from an oil-based economy

to a diversified industrial economy which can both

meet the needs of its growing population and

achieve the net-zero objectives outlined at the

United Nations Climate Change Conference

(COP26).

Given the race towards net zero and the energy

transition internationally, sources of international

funding for fossil fuels including gas may become

limited and keenly contested by other developing

countries with oil and gas resources which leaves

Nigeria in a race against time.

42


NIGERIA OIL AND GAS

Temile Awards New Vessel Building Contract to Hyundai,

NSML to Boast Nigerian LPG Market international gas supply value chain.”

Temile Development Company, a

Nigerian indigenous shipping

company, has signed a contract

with the Hyundai Mipo Dockyard (HMD),

a foremost vessel manufacturer in South

Korea, for the construction of new

23,000CBM Liquefied Petroleum Gas

(LPG) vessel carrier.

The contract also involved the Nigerian

Shipping Management Limited (NSML), a

shipping subsidiary of the Nigeria LNG

Limited, which was contracted to

supervise the construction of the vessel

to ensure it meets specifications and

international standards. NSML is an

integrated maritime services company

providing a wide range of worldclass

maritime and shipping services including

training, manning, fleet management

and consultancy services.

According to report, there are limited

numbers of LPG vessels owned and

managed by Nigerian companies, which

had been highlighted as part of the

factors responsible for the insufficient

supply of the LPG product to domestic

market.

Based on this development, Nigeria’s

LPG market is set to witness a positive

growth opportunities as this vessel,

when operational, will help to ramp up

the supply of cooking gas in Nigeria.

The LPG carrier vessel is the second that

is being constructed by the Temile

Development Company and is a sequel to

the first vessel which was delivered in

2020 currently chartered to

Nigerian LNG Limited for domestic LPG

supply. The first LPG vessel delivered in 2020

and the newly awarded were part of a twovessel-

building project valued at over $120

million.

In a statement made known to The Energy

Republic, the Chief Executive Officer of Temile

Development Company, Alfred Temile said

that the new LPG vessel carrier is a high-end

specification vessel which has been designed

by NSML in accordance with bespoke

requirements using HMD’s highly efficient

eco-design.

Temile said the new LPG carrier was expected

for delivery on July 26, 2026 at HMD in Ulsan,

Korea, adding that the development

demonstrates the company’s commitment

and support to the Nigerian Local Content Act

and establishes their confidence in local

capacity to deliver international acceptable

standards.

He said, “We are delighted to execute the

construction of our new LPG carrier with

HMD, bringing onboard NSML to supervise

the construction.

" A s a n i n d i g e n o u s c o m p a ny, t h i s

demonstrates our commitment and support

to the Nigerian Local Content Act and as well

establishes our confidence in local capacity to

deliver international acceptable standards.

“Working with HMD again makes us feel in

very safe hands as we are confident that this

eco-design/cleaner fuel vessel shall be

constructed in line with international best

practices and industrial regulations thereby

creating a space for the vessel in the

In a video message delivered during the

agreement signing ceremony held at the

sidelines of the 2022 World Gas Conference in

Daegu, South Korea, the Executive Secretary

of NCDMB, Engr. Simbi Kesiye Wabote

commended Temile Development Company

for its bullish initiative in investing in an area

that is regarded as off-limits for local players.

Wabote indicated that the agreement signing

event and subsequent construction and

supervision of the contract align with the

Board’s strategic plan of maximizing the

potentials in the Midstream and Downstream

Sectors of the Nigerian oil and gas industry,

especially as the oil and gas industry strives to

actualize the Decade of Gas policy of the

Federal Government.

According to him, “this project clearly

supports our LPG penetration initiative in

Nigeria and will further close the gap in LPG

penetration in Nigeria.”

He stated further that the project will bring

invaluable local content opportunities in

technology and innovation, human capital

development and research and development.

Speaking further, the Executive Secretary

commended Hyundai for the work it was

doing at the Brass Shipyard and other

investment projects in Nigeria that will

support the repair of vessels. He also

applauded NLNG for the strategic initiative of

deploying 100 per cent LPG to the local

market to close the gap in respect of LPG

penetration in-country, adding that the

company has helped in reducing cost as well

as creating a cleaner source of energy for our

people.

43


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NIGERIA OIL AND GAS

DESMI Opens 2nd Office in Nigeria

DE S M I , D e n m a r k ’s o l d e s t

company, has opened its 2nd

office in Nigeria to expand its

business portfolio in the country. The

company have sold its solutions to

Nigeria for more than 20 years – and it is

now time to take further steps into the

Nigerian market being even closer to its

customers and partners.

Speaking to Leslie P. Andrews,

Managing Director of DESMI Africa

commented, "You can feel the

enthusiasm and good mood. This is

another solid step for the DESMI Group

into the African market, which has been

served and supplied with solutions

from DESMI for decades.

“We are happy. The Nigerian market is a

huge market to service, and with the

increasing demand for our solutions

both within oil spill and pumps, it makes

perfect sense to have our presence,

team, and knowledge, locally” says Mr.

Andrews.

DESMI Nigeria (Official company name:

DESMI Flow Technology W.A. Limited)

will be located in Lagos, and the young

startup team consists of Office

Manager Najeeba Abdulmajeed

Owolabi and the sales team Philbertus

Mujuni, Collins Ugochukwu Afoaku and

Elijah Sobalaje Ogunniran. The sales

team has used the last year to support

our local customers preparing for the

strategic move into one of Africa’s

largest economies.

“Being here locally, with our own office,

is a milestone, and our goals have been

set. We have high expectations! We

want to be one of the most preferred

brands with our flow technology

solutions within oil spill response,

marine debris trash, engine room

pumps for marine and utilities, and

much more. An exciting future is ahead

of us in Nigeria” concludes Mr.

Andrews.

In 2012 DESMI opened its 1st office in

Africa, in Dar es Salaam, Tanzania, and

this month the 2nd office of DESMI

Africa has opened in Nigeria.

SPECIAL FEATURE: FPSO WORLD CONGRESS 2022

FPSO World Congress 2022 Makes

its Grand Return

in September

The resilient FPSO industry has

seemingly brushed off the

impact of the pandemic as Oil

prices continue rising and FPSO projects

return to the table. According to industry

reports, FPSO investments are projected

to reach $67 billion by 2025, with 20

projects expected to be awarded by the

end of 2022. This comes alongside a shift

in focus on renewable energy, the energy

transition and achieving sustainability in

projects.

The 23rd Annual FPSO World Congress

2022 returns on 12-15 September and

will be held at Sands Expo & Convention

Centre in Singapore. At this year’s special

edition, there will be 2 exclusive Focus

Days happening alongside the main

congress – FLNG & FSRU Asia and

Offshore Wind Asia. The focus on

sustainability has become essential,

and FPSO owners need to further

solidify their position in an evolving

industry.

This rising pressure to ensure

sustainability in projects and renewed

focus have forced FPSO project

stakeholders to re-evaluate existing

processes in building “green FPSOs”,

explore alternative power sources and

invest in new technologies to optimise

operational safety and costs.

FPSO World Congress 2022 remains

the focal point for industry players to

gather and explore best practices in

strengthening the future of FPSOs

a l o n g w i t h t h e i n d u s t r y ’ s

t r a n s f o r m a t i v e r o a d m a p t o

sustainability and renewable energy.

45


NIGERIA OIL AND GAS

ANOH Project a Game Changer for Seplat’s

Gas Business – Seplat CEO

S

eplat Energy Plc’s Chief Executive

Officer, Mr. Roger Brown, has

commended the progress currently

made on its gas project – the Assa North-

Ohaji South project (ANOH) in Imo State,

describing the project as a game changer for

the company’s gas business.

Mr. Brown who spoke to Nigerian journalists

on the sideline of the just concluded 2022

Offshore Technology Conference in

Houston, Texas, noted that the 300 million

standard cubic feet per day (mmscfd) gas

project will begin operation next year as

against the earlier planned end of first halve

of 2022.

The Seplat chief explained the cause of delay

of pushing the first gas from the plant to

customers, saying it was as a result of supply

chain issues.

He said: “The ANOH is a game changer in

terms of gas business. By mid next year the

project will be up and running. The first gas is

being delayed because one of the pipelines

connecting into it is being delayed by supply

chain issues in getting the steel pipes from

China. However, it is a temporary issue.

“For us, the 300mmscf/d gas plant is

material and will do dry gas processing that

will be supplied to industrial customers.

ANOH field which is the one of the biggest

onshore fields in Nigeria is a condensate rich

field. The liquid is in two reservoirs but one

of them in particular is rich in it.

“When we start producing and add our

working interest element into it, we will add

almost 10,000 per day production of

condensate.

“We will get 50 per cent of the ANOH gas

plant production. We are going to have 50

per cent of the 300 million standard cubic

feet per day of gas that is 150 mmscf/d of gas

processed, plus 10,000 per day day

production in condensate.

“That is a material game changer for us as a

business, we will reinforces our gas

credentials in the country. We will become

one of the biggest gas processing company

next to government in Nigeria.

“It is a very important part of our business

model to deliver that.

“We started investing in gas in 2012, when

we first bought the first assets from Shell.

Gas has no value then, it was a headache.

“What we found over the years is that it has

become commercial in the country,

especially domestic gas supply. It is a good

business opportunity and the ANOH gas

plant will augment and grow that quite

dramatically. We are big believer in

domestic gas, we also believe in Nigeria

Liquefied Natural Gas (NLNG) for export.

But for all being exported will be bad for

Nigeria.

“We need to develop more domestic gas

because the price of diesel in the country is

insane. The average Nigerian is spending a

lot on power, electricity, diesel and PMS

(petrol) generators.

“It is hugely holding back the country. It is

very polluting, noisy and very expensive. It is

five times more expensive than gas and it is

not creating the jobs within the country

because companies cannot afford to run

their operations on fuel.

“ANOH will create enormous value for the

country. We work with government, we will

love its completion to be faster.”

ANOH plant project is one of the Federal

Government’s 2018 Seven Critical Gas

Development Projects and one of Nigeria’s

most strategic gas projects. It will process

Mr. Roger Brown, Chief Executive Officer of Seplat Energy

gas captured from Seplat’s onshore oil block

in oil mining lease (OML 53) in Imo State.

The project is being built by ANOH Gas

Processing Company Limited (AGPC), an

incorporated joint venture (IJV) owned

equally (50 per cent apiece) between Seplat

and the Nigerian Gas Company (NGC),

which is an arm of the Nigerian National

Petroleum Company Limited (NNPC). Seplat

and NGC have previously provided a

combined US$420m in equity funding and

the project is now fully funded.

In January last year, Seplat raised $260

million, which was provided by a

consortium of seven banks – Stanbic IBTC

Bank Plc (advisor), United Bank for Africa

Plc, Zenith Bank Plc, FirstRand Bank Limited

(London Branch) / RMB Nigeria Limited, The

Mauritius Commercial Bank Limited, Union

Bank of Nigeria Plc and FCMB Capital

Markets Limited.

The plant’s construction cost is estimated at

$650 million. The two stakeholders – Seplat

and NGC, had previously provided a

combined $420 million in equity funding.

The AGPC construction cost came down to

$650 million, inclusive of financing costs

and taxes, as a result of cost optimisation

programme, significantly lower than the

original projected cost of $700 million.

Seplat is a leading provider of natural gas to

Nigeria’s power sector, supplying around 30

per cent of gas used for electricity

generation.

46


NIGERIA OIL AND GAS

Stakeholders Chart Policies for Midstream,

Downstream Sectors

Participants at the just concluded

Nigerian Content Midstream

and Downstream Oil and Gas

Summit organized by the Nigerian

Content Development and Monitoring

Board (NCDMB) have beckoned on the

Central Bank of Nigeria (CBN) to create

a unique window of forex access to

facilitate seamless operations of

modular refineries in the Nigerian oil

and gas industry.

This recommendation was part of the

communique of the summit which was

read by the Manager Corporate

Communications, NCDMB, Mr. Esueme

Dan Kikile at the end of the summit on

Tuesday. According to him, delegates at

the summit encouraged relevant

authorities to adopt creative initiatives

to address the nagging issue of irregular

supply of feedstock to the modular

refineries, which is hampering the

smooth operations of the plants. They

further advocated that the Federal

Government should divest from the

petroleum depots and address the

dysfunctions of Nigerian pipeline

infrastructure.

Participants also requested that the

NCDMB should consult more with

midstream/downstream stakeholders

to co-produce solutions to the peculiar

challenges confronting the sector.

The recommendations weregeared to

address some ofthe challenges of the

sectors which were identified by the

delegates. These included that the

midstream/downstream sectors face

uncertainty due to the sustenance of

subsidies, inconsistent supply of

feedstock, and the broken product

distribution infrastructure. They also

highlighted the challenges that

modular refinery operators face in

sourcing forex and called attention to

the hurdles and delays that complicate

the process of operationalizing a valid

import waiver.

The two-day summit received 11

papers and featured three-panel

sessions and at the end came up with a

few high-impact actions that would

help to maximize the potentialities in the

midstream/downstream sectors of the oil

and gas sector.

One of the action items is an increase in

NCDMB’s collaboration and alignment with

other relevant ministries, departments, and

agencies as well as stakeholders to

mainstream Nigerian Content bottom lines

i n refining, p ro c e s s i n g , stora ge,

construction, fabrication, distribution,

marketing, and retail to liberate the

potential of the sectors.

Other suggestions point to the need to

encourage accelerated investment in

modernizing and upscaling the local supply

chain to ease petroleum product

distribution and to formulate and

implement policies and interventions to

support indigenous operators and make

them globally competitive in terms of

quality delivery and product pricing. The

recommendation also included the need to

incentivize the collocation of modular

refineries and the depots and the Free Trade

Zones to enable easy offtake of petroleum

products and promotion of the utilization of

gas as an energy source of choice in Nigeria

and addressing the forex liquidity

constraints of indigenous companies.

Participants at the summit observed that

the midstream and downstream sectors

have numerous leverage points to create

value and these opportunities are yet to be

fully explored. They also indicated that the

modular refineries could be potential gamechangers

as they are well-suited to meet the

demands for refined petroleum products in

their catchment areas.

The participants thanked the Board and its

leadership for tenaciously building the

momentum of Nigerian Content and called

on all stakeholders in the midstream and

downstream sectors to support the

progress achieved so far and ensure that

they take the posture of good faith

compliance with all Nigerian Content

requirements.

Delivering the vote of thanks, the Executive

Secretary, NCDMB, Engr. Simbi Kesiye

Wabote assured participants that their

recommendations would be considered

during policy formation.

He also promised that the Board would

liaise with relevant agencies to address

some of the identified challenges that are

outside the remit of the Board’s mandate.

“We would prioritize and try to unlock the

challenges and continue to push the limits,”

he concluded.

49


NIGERIA OIL AND GAS

FG To Maximize Local Content Opportunities In

Midstream/Downstream Sectors

T

he Federal Government has

expressed firm determination to fully

catalyze investments in the

midstream and downstream sectors of the

petroleum sector, with a view to creating

employment for teeming youths and

maximizing local content opportunities.

The Minister of State for Petroleum

Resources, Chief Timipre Sylva gave

assurance on Monday when he declared

open the Nigerian Content Midstream and

Downstream Oil and Gas Summit organized

by the Nigerian Content Development and

Monitoring Board (NCDMB) in Lagos.

He stated that the Nigerian Oil and Gas

industry is currently in the phase of

exploring the vast opportunities and

potentials associated with the midstream

and downstream sectors and commended

the NCDMB for intervening to foster

dynamism in the sectors through the

summit.

He acknowledged that the midstream and

downstream sectors did not receive the

deserved focus in the past but hinted that

the situation was set to change because the

recently enacted Petroleum Industry Act

(PIA) contains fiscal incentives to attract

i nvestment i n ga s d e v e l o p m e n t ,

distribution, penetration, and utilization

and provides exceptional care for host

communities. He charged industry

stakeholders to take determined steps to

unlock natural gas and domestic production

potentials and use the opportunities in the

gas ecosystem to drag millions of Nigerians

out of energy poverty.

In his welcome address, the Executive

Secretary, NCDMB, Engr. Simbi Kesiye

Wabote affirmed that the Board is keen to

maximize Local Content opportunities in the

midstream and downstream sectors

because they offer the greatest number of

employment opportunities as well as

longevity of jobs in contrast to the upstream

sector of the oil industry.

“This provides means to absorb outputs of

our Human Capacity Development

programs in the form of job opportunities,”

he added. He also stated that the entry

barrier for businesses to partake in the

midstream and downstream sectors of the

industry is relatively lower compared

H.E. Chief Timipre Sylva, Nigerian Minister of

State for Petroleum Resources

to the upstream sector and there are vast

business opportunities in the midstream to

downstream sectors, ranging from

processing, transportation, storage, and

distribution that could be started on small

scale and later scaled up to bigger

enterprises thereby growing in-country

capacities and capabilities.

According to Wabote, the profit margin is

also attractive in the midstream and

downstream, especially in the LPG

distribution value chain and this serves as an

incentive to attract a wider number of

players.

He emphasized the need to maximize the

potentials of the midstream and

downstream sectors to ensure energy

security and national pride, adding that the

direct social impact of a productive and

efficient midstream and downstream sector

of the oil and gas industry also needs to be

maximized.

The Executive Secretary further explained

that the Nigerian Oil and Gas Industry

Content Development (NOGICD) Act

established NCDMB as the regulator of

Nigerian Content in the entire spectrum of

the Nigerian oil and gas industry.

He added that the Board’s regulatory role is

not to stifle the industry but to provide

enabling , and inclusive, business

environment for businesses to thrive with

the active participation of critical

stakeholders.

Giving a rundown of the Board’s

achievements in the midstream and

downstream sectors, the Executive

Secretary listed the partnership with

Waltersmith, which resulted in the delivery

of the 5,000barrels per day modular

refinery in Imo State, the 2,500barrels per

day Duport Modular Refinery located in Edo

State, which is due for commissioning this

year as well as the 2,000barrels per day

Atlantic Refinery and the 12,000barrels/day

Azikel Hydro-skimming Refinery both in

Bayelsa state, which are under construction.

Other achievements of the Board include

the partnership with the NNPC to construct

a 50,000liters petroleum products terminal

in Brass, the partnership with Bunorr

Integrated Energy Ltd for the establishment

of 48,000 liters/day Base Oil Production

Facility in Port Harcourt, Rivers State, which

is due for commissioning this year and the

ongoing construction of the Eraskon Lube

Oil factory in Gbarain, Bayelsa State

Dwelling on the LPG value chain, the

Executive Secretary stated that the Board

had gone into partnership with some

investors to develop some projects. Some of

them included the partnership with NEDO

Gas Processing Company in Kwale, Delta

State for the establishment of 80MMscfd of

Gas Processing Plant and a 300MMscfd

Kwale Gas Gathering hub, partnership with

Triansel Gas Limited in Koko, Delta State for

the establishment of 5,000MT LPG Storage

and Loading Terminal Facility and

partnership with Brass Fertiliser for the

development of a 10,000MT/day Methanol

Plant at Odiama in Brass.

Others are the partnership with Butane

Energy to roll out LPG Bottling Plants and

Depots in Abuja and 10 northern states and

partnership with Southfield Petroleum for

the establishment of 200 MMscfd gas

processing plant at Utorogu, Delta State to

produce 123,000MTPA of LPG, which is

about 10 percent of current LPG demand

nationwide.

Other investments include the partnership

with MOB Integrated Services for the

construction of the 500MT Inland LPG

terminal which is currently in operation at

Dikko, Niger State as well as the partnership

with Amal Technologies to set up a plant in

Abuja to produce Smart Gas/Smoke

Detector Alarm devices.

50


NIGERIA OIL AND GAS

Nigeria, made the first commercial find of

hydrocarbons. Shell Companies in Nigeria,

therefore, share a momentous tie with the

Oloibiri community and it is our desire to

leave impactful memories here.”

The phase two of the Shell Oloibiri health

programme includes the Oloibiri Health

Campus at Oloibiri Town; the Drug

Distribution Centre at Emeyal II; a 400-

metre Oloibiri access road to the health

campus, and the Ogbia Safe Maternal and

Infant Care Programme.”

R-L: Managing Director, The Shell Petroleum Development Company of Nigeria Limited (SPDC) and

Country Chair, Shell Companies in Nigeria, Osagie Okunbor; Shell Corporate Relations Manager,

Evans Krukrubo; and Governor of Bayelsa State, Senator Douye Diri, at the inauguration of the

SPDC-sponsored Oloibiri Health Programme in Oloibiri, Ogbia Local Government area of Bayelsa

State… on Thursday

Shell Inaugurates Phase-2 of

Oloibiri health programme

Energy company, Shell, has

inaugurated the second and final

phase of its comprehensive health

care projects for Oloibiri and other

communities in Ogbia Local Government

area of Bayelsa State.

“Corporate Social Responsibility means

doing well. What you have done today

means you’re doing well. You are

impacting the lives of the communities,

of people, and of government of the

state.

“You have done so well today, and we

commend you. You are investing in

education and in social development in

Ogbia to improve the quality of life of our

people,” Bayelsa State Governor, Senator

Douye Diri said on Thursday while

leading other state officials to open the

state-of the-art facilities.

Speaking at the inauguration event,

Managing Director, The Shell Petroleum

Development Company of Nigeria Limited

(SPDC) and Country Chair, Shell Companies in

Nigeria, Mr. Osagie Okunbor, described the

dual-phased suite of health projects in

Oloibiri as a reinforcement of the

commitment of the oil major to the health

and wellbeing of its hosts and Nigerians as a

whole.

Okunbor said, “The projects are to serve as a

reference point for sustainable primary

health care delivery, which is the foundation

for the attainment of the Universal Health

Coverage as prescribed by the World Health

Organisation (WHO).”

According to him, “Oloibiri holds an

important place because when the narration

of Nigeria’s oil and gas journey is told, it will

always be mentioned that here, in 1958, Shell

Phase one of the programme was

inaugurated in 2019 to provide universal

health coverage for Oloibiri where Shell’s oil

and gas exploration began in Nigeria over 60

years ago. The delivery of the projects was

to f u l f i l S h e l l ’s commitments i n

commemoration of Nigeria’s centenary held

in 2014.

Phase one of the programme included a

remodelled and fully equipped General

Hospital in Kolo; fully equipped laboratories

in the College of Health Technology,

Otuogidi; and solar-powered water

treatment facilities for the communities. As

part of the programme, 100 indigenes of

Ogbia, were also selected for the Special

Shell LiveWIRE programme for economic

empowerment.

The other Shell-sponsored centenary

projects are the digital library in Port

Harcourt and ultramodern health facilities

in different locations in Delta State.

51


NIGERIA OIL AND GAS

TotalEnergies Celebrates 60 Years Operational Excellence

in Nigeria

TotalEnergies EP Nigeria LTD has

celebrated its 60th year of oil

exploration and production in Nigeria on

Friday, 13th May 2022 at the Lagos Continental

Hotel.

The anniversary which was themed ’60 years of

successful partnership with Nigeria’ brought

together global executives, International Oil

Companies (IOCs), government official, industry

players, investors, scientists, and top buyers to

mark the milestone event.

The French oil giant on 9 May 1962 began

operations in the upstream sector of the

Nigerian hydrocarbon industry.

Over the past six decades, the company has

made significant socio-economic contributions

in Nigeria as one of the country’s largest oil and

gas producers and largest investors with over

530 service stations.

“TotalEnergies is the only IOC that is present in

all the oil and gas value chains- from the

upstream, to midstream and to downstream

with a combined age of 126 years (60 years for

upstream and 66 for downstream),” said Mr.

Mike Sangster, MD/CE TotalEnergies EP Nigeria.

“TotalEnergies will continue to collaborate with

the government, our partners and other

stakeholders to help further develop the

economy of the country, to be able to meet the

socio-economic needs of its citizens,” stated Mr.

Mike Sangster.

“It gives great pride and a sense of achievement

to see our company grow over the years,

embracing good values, and developing a

strong and sustainable corporate culture.

Making us a shining example among our

industry peers today.” also speaking Mr.

Nicholas Terraz, President TotalEnergies EP.

“With new fields and increased productivity,

the company has continued to expand and

evolve becoming the second largest operator in

Nigeria, accounting for 20% of the country’s oil

and gas production”. “Electricity offers an

exciting opportunity in Nigeria, and it is an area

which we would like to explore while also

expanding the scope of our company to

renewables,” explained Mr Nicholas Terraz.

OPEC increases Nigeria’s crude oil

production quota to 1.8mbpd

The Organisation of the Petroleum

Exporting Countries (OPEC), has

increased Nigeria’s crude oil

production quota to a new target of 1.799

million barrels per day (mbpd) for July 2022.

This is an increase of 27,000bpd when

compared to the 1.772mbpd target

approved in June to a new target of

1.799mbpd for July.

According to a statement issued by the

organisation at its 29th OPEC and non-OPEC

Ministerial Meeting, “OPEC+ also adjusted

upward the monthly overall production by

648,000bpd for the month of July with a

target production of 43.206mbpd.

“The 29th OPEC and non-OPEC Ministerial

Meeting was held via videoconference on

June 2.

“The meeting noted the most recent

reopening from lockdowns in major global

economic centres. It further noted that

global refinery intake is expected to

increase after seasonal maintenance.

“The meeting highlighted the importance of

stable and balanced markets for both crude

oil and refined products.”

The report also stated that, the meeting

extended the compensation period until the

end of December as requested by some

underperforming countries, and requested

that underperforming countries submit

their plans by June 17.

The meeting directed that compensation

plans should be submitted in accordance

with the statement of the 15th OPEC and

non-OPEC Ministerial Meeting.

President Buhari, NNPC Showcase Nigerian Oil and Gas

Investment Opportunities in Spain

The Group Managing Director, Nigeria

National Petroleum Company Limited

(NNPC) Mallam Mele Kyari has

reiterated his commitment to sustain the

strategic energy partnership between Nigeria

and Spain.

Mallam Kyari disclosed this while addressing

Nigerian and Spanish business leaders on

investment opportunities in the Nigerian Oil

and Gas Industry, in Madrid, Spain, on the

sidelines of President Muhammadu Buhari’s

state visit to Spain, Wednesday.

President Buhari had earlier met with the

Spanish President, Pedro Sanchez, King of

Spain, His Majesty, King Filipe VI, and gave a

speech at the headquarters of the World

Tourism Organization, WTO, in Madrid.

During the visit, President Buhari said Nigeria

looked forward to increasing bilateral relations

with Spain, even as he signed bilateral

a g r e e m e n t s a n d M e m o r a n d u m o f

Understanding (MoUs) with the Spanish leader,

covering areas of prisoner transfer, sports and

culture and the economy.

Describing the partnership between Nigeria

and Spain as an important one for the NNPC,

GMD/CEO said “26% of all LNG produced in

Nigeria ends up in Spain. 14% of all Crude Oil

produced in Nigeria ends up in this country.

Clearly for us as a business, it is an important

market for my company.”

Mallam Kyari explained that the world would

need energy for today and for the future in

industries such as power, IT, automobile etc.

“We know that energy transition is real. We

know that net-zero by 2050-2060 is real. But it

doesn’t mean zero hydrocarbons in 2050-2060.

It means that you are going to have a cleaner

use of hydrocarbons,” Kyari added.

He said investors must see where their money

can come out from and when they invest, they

must see that they can recover their cost and

make some margin from it.

While noting that in line with global acceptance

of gas as a transition fuel, Nigeria has since

declared 2021-2030 as the decade of gas.

“In our country today, we have a legislation that

has clearly created a commercial National Oil

Company which will be unveiled by our

President in the coming days. Together with the

Spanish business community, I am confident we

can build this industry,” Kyari concluded.

52 06 09 22


NIGERIA AND GAS

F E AT U R E D C O N T E N T

Dr. Philip Mshelbila

Managing Director/CEO,

Nigeria LNG Limited (NLNG)

Celebrating NLNG

at 33 years

Nigeria LNG Limited has celebrated 31st anniversary

since its establishment.

NLNG, which is jointly owned by the Federal

Government and three interna onal oil companies,

was established on May 17, 1989, to harness Nigeria’s

vast natural gas resources and produce the LNG and

natural gas liquids for export.

With immense pride, I join our

s h a re h o l d e rs , staff, a n d

stakeholders to celebrate

NLNG’s 33rd incorporation anniversary.

Since 17th May 1989, when the

company was incorporated, we have

vigorously pursued our vision of being

“a globally competitive LNG company,

helping to build a better Nigeria.” NLNG

h a s g e n e ra t e d va l u e fo r o u r

shareholders and the country,

positively changing the narrative in the

country.

NLNG has also contributed to the

development of this country at

national, state and local government

levels through prompt payment of all

applicable taxes, rates and levies. It has

also proven to be a good corporate

citizen through various Corporate

Social Responsibility (CSR) initiatives

within its host communities and at the

national level. Our company has

touched lives in significant areas such

as economic empowerment, health,

education, infrastructure development

a n d s u s t a i n a b l e c o m m u n i t y

development. Over the years, it

harnessed natural gas that would have

otherwise been flared, thereby

contributing immensely to a cleaner

environment.

And by delivering 100% of its liquefied

petroleum gas (LPG) production into the

domestic market, it helps Nigerians

transition to cleaner cooking fuels.

Our growth ambitions are being achieved

through the Train 7 project, and we continue

to pursue other goals concerning safety,

energy transition, and decarbonisation.

For us, the future is promising; the future

needs gas. We will continue to provide

cleaner energy to Nigeria and the world.

Achievements:

NLNG has disclosed that it has paid over

$13bn to the Federal Government for feedgas

purchase since the commencement of

its operations. Over $7bn in dividends and

$8bn in taxes had been paid to the Nigerian

government through the Nigerian National

Petroleum Corporation.

The company said, “Thirty-one years ago,

our founding fathers achieved the

realisation of what was previously an

elusive dream. On this day, the Nigeria LNG

was incorporated, paving the way for the

rise of one of Africa’s leading and most

successful brands.

“We have recorded many milestones within

31 years of incorporation and over 20 years

of production. With a 22 MTPA six-train

plant on Bonny Island, the NLNG has reduced

gas flaring from 65 per cent to less than 20 per

cent and generated over $108bn in revenue.”

The NLNG also disclosed that it had ensured

the supply of 50 per cent of cooking gas in the

country, adding that it had achieved 100 per

cent Nigerian management and 95 per cent

Nigerian staff.

The company said, “We are the leaders in

corporate social responsibility. With the

Federal Government, we are building Bonny-

Bodo road worth over N120bn; we sponsor

$100,000 Nigeria Prize for Literature Prize and

Nigeria Prize for Science as well as

scholarships.

“We look to the future with the NLNG Train 7,

increasing our capacity by 35 per cent. This will

make our market presence stronger and

generate more value from the over 200 trillion

cubic feet of gas reserves in Nigeria.”

Last week, the NLNG awarded the

engineering, procurement and construction

contracts for its Train 7 project to the SCD JV

Consortium, comprising Saipem of Italy,

Japan’s Chiyoda and Daewoo of South Korea.

The Train 7 project intends to increase the

company’s production capacity from 22

metric tonnes per annum to about 30 MTPA

and will constitute part of the investment of

over $10bn, including the upstream scope of

the LNG value chain.

54 22


ADELAAR ENERGY INTERVIEW

"We Maintain a High

Energy Mix and Still

Drive Clean Gas

Production" - Grace

Orife, CEO of Adelaar

Energy Limited

The Energy Republic talks to Dolapo Kukoyi, Partner

at Detail Solicitors, regarding her exper se and legal

services in the Nigerian oil and gas industry. In this

interview, she outlined the key pillars of developing a

business model for energy infrastructure projects just

like the EGINA project where her company was the

legal adviser in nego a ng the $350 million Joint

Venture between LADOL FZE and Samsung.

Grace Orife

TER: Welcome back to the Post COVID-

19 era. Please tell us about yourself...

Grace: Thank you. I am Grace Orife and

I am an energy economist and

strategist. I started consulting at

PricewaterhouseCoopers (PwC), before

finding my niche in the energy industry

where I have spent two decades. The

energy journey started at Pecten

Cameroon and then Shell Nigeria.

Working as a business analyst and

economist for several years at Shell, I

honed the skills necessary to succeed in

the sector and later proceeded to work

at Addax Petroleum Development

Company Ltd and Eroton Exploration

and Production Company Limited

taking on Managerial roles.

I hold a bachelor’s degree in accounting

from the University of Buea in

Cameroon, and an MBA from Warwick

Business School in the United Kingdom.

I am presently pursuing a doctorate in

st rategic m a n a gement at t h e

International School of Management in

France. I’m currently the CEO/MD of

Adelaar Energy Limited, a Fullstream

Oil & Gas Consultancy and Services

Company with a focus on the

acquisition and operation of assets

across the entire energy value chain

within Nigeria and beyond. Our mission

at Adelaar is to drive value for our

customers and stakeholders in a safe and

environmentally-sound manner.

TER: As a Woman in Energy, please could

you shed more light on your career journey

in the oil and gas industry with emphasis

on your company's track records so far?

Grace: I am pleased that African women

h ave i ntensified t h e i r effo r t s i n

development and networking to support

their growth in the oil and gas industry.

Previously, women were not sufficiently

visible in this sector. Luckily times have

changed and things are changing too. There

is still more to be done to achieve a level

playing field but surely improvements have

been recorded and women are now part of

shaping the energy landscape and future

across Africa.

As I mentioned earlier, I started as a

Business Planning and Economic Analyst for

Shell Exploration and Production Company

(Pecten) in Cameroon. Then I worked as a

Business Analyst and Economist for Shell

Petroleum Development Company of

N i g e r i a . T h e s e gave m e a s o l i d

understanding and knowledge of upstream

oil business across onshore and Deepwater

environments and also prepared me for

Managerial positions at Addax Petroleum

and Eroton Exploration & Production

company respectively.

I became CEO of Adelaar Energy in January

2022, two years after it was birthed. We are

not solely interested in the exploration and

development of oil or gas reserves; we are

also committed to the development of our

host communities through employment

creation, skill development, and support for

projects that bring sustainable value to the

local economy. Right now, we are working

towards finalizing a few collaboration deals.

The journey has been a learning curve for

everyone on the team and I’m optimistic

that the future of Adelaar and Africa at large

will be one for the books.

Adelaar Energy Limited is a full-stream oil

& gas consultancy and services company,

operating in the entire value chain of the

energy, oil, and gas industry. How is your

company accelerating to meet the low

carbon demand?

Thank you for this question. The thing is

there is a huge gap in energy distribution

across Africa, despite being home to 17% of

the world’s population. The continent

merely accounts for 4% of global power

supply investment. At Adelaar, we

understand that to address this challenge, a

blend of energy resources is required to

build a more reliable power system. Our

operations will be in such a way that we’re

able to maintain a high energy mix and still

drive clean gas production. We also provide

sustainable energy solutions that will help

55


ADELAAR ENERGY INTERVIEW

Africa transit to an era where dependence

on fossil-fuel-derived energy is significantly

reduced. We’re not only working to combat

energy poverty across the continent, but

we are also promoting sustainable

production standards for healthy living.

TER: What are Adelaar's main building

blocks for Clean Energy Development?

Grace: To successfully carry out our

projects and promote clean energy

development, we are ensuring a

decentralized and inclusive regulatory

framework. At Adelaar, we are also open to

innovative and alternative financing

mechanisms and not just government

funds. We’re actively promoting

knowledge generation, data accessibility,

and capacity building. In all our projects, we

are constantly mobilizing local resources

and labor for education and exposure. Our

mission is simple; we want every operation

to be conducted in a safe and environmentfriendly

manner.

TER: What's your company's pivotal

project development plans and new

investment focus for the year 2022?

Grace: Adelaar E&P is currently working on

the operatorship of a marginal field asset in

Nigeria as well as brownfield assets in other

nations across the continent. We have

already been awarded distributor status by

the Nigerian National Petroleum

Corporation (NNPC) and we have signed an

agreement with one of the major operators

in the transport sector. Another one of our

project plans is to fully kick off operations in

our subsidiary company, Adelaar Safety.

Adelaar Safety is involved in the

manufacturing of Personal Protective

Equipment (PPE), Safety Training and

Modelling, Wholesale purchase and sales

of Safety items, Safety Consultancy

Services, Safety Support, Environmental

Impact, Social Assessments/Studies, and

Environmental Compliance Monitoring.

Already, we’ve made PPE supplies for some

industry players in Nigeria.

TER: Interestingly, you were among the

panelists that participated in the State of

African Energy, Oil, Gas, and Hydrogen

Webinar, hosted by the Africa Energy

Chamber recently. How would you

evaluate the opportunities across the

entire value chain of the African oil and gas

industry?

Grace: First, let me appreciate the African

Energy Chamber for the great light they’re

shining upon our industry. Per your

question, I’ll say that we have so many

energy opportunities across the continent.

The problem here is just inadequate

distribution, poor funding, and execution of

ideal strategies. Cross-utilization of

expertise and resources across borders can

improve the energy distribution challenge

we’re currently facing in Africa.

The African continent is blessed with

resources- renewables and non-renewables

alike. An appropriate policy framework that

encourages investment, development, and

encouragement of indigenous labor and

technology is required to harness these

resources to grow African Economies and

propel the continent’s overall growth.

TER: Natural gas has been identified as the

driver of Africa’s energy future. What's

your opinion on developing an Intra-

African gas pipeline within the continent?

Grace: Africa possesses an impressive

natural gas resource base. Developing an

Intra-Africa gas pipeline would enable

growth and strengthen industry operations

and directed change across the continent.

We need to encourage cross-utilization of

expertise and resources across our borders

if we want to sustain our future as Africans

and leave our mark in the global oil industry.

TER: There has been a continuous

discussion around the Russia-Ukraine war

with a spotlight on the role of Africa in

filling up the supply gap of gas in Europe.

What should African Government do to

position the continent as a preferable gas

supplier to Europe?

Grace: Challenges like The Russia-Ukraine

war provide a good opportunity for Africa to

monetize gas reserves and earn significant

revenue from existing LNG plants. The

current situation however has exposed the

effects of a lack of investment in developing

gas reserves in recent times.

It is important to continuously fund

developments that can take advantage of

the European market, noting that the

African continent’s energy needs would be

more than sufficient to mop up any surplus.

About Adelaar Energy

With the objective to drive an increment in

value for humanity in the energy sector in a

safe and environmentally sound manner,

Adelaar Energy has brought into play an

extensive experience and expertise in

harnessing natural energy to service its

customers, as well as preserve the planet.

Adelaar Energy is a fullstream Oil and Gas

Consultancy and services company that

operate other professional Oil and Gas

Services like Engineering, Procurement,

Construction and Implementation Solutions

(EPCI); and Alternative Energy Products and

Services.

3 Upstream (Adelaar E&P Limited)

3Engineering, Procurement,

3Construction and Implementation (EPCI)

3 Midstream and Downstream Services

3Alternative Energy Products and Services

56

OIL AND THE GAS ENERGY REPUBLIC REPUBLIC I SPECIAL I SPECIAL EDITION EDITION

Media Partner

THE ENERGY REPUBLIC


African Gas Market: Challenges

Growth Opportunities , Forecast

Africa holds over 600 trillion cubic feet (tcf) of proven gas

reserves and accounts for 7.1 percent of the global gas

reserves as of 2019, according to a Deloitte report. The

Continent is gradually turning into a big gas market in the world and

the development of African gas resources can address its electricity

deficit, bring power to major industries, unlock billions of dollars of

investment, generate long-term economic growth, and create

employment opportunities, including a major preferable supplier of

gas to European countries among others.

In this article, The Energy Republic provides a comparative analysis

of the latest trends and challenges, including the outlook of the

African Gas Market with expert commentaries and

recommendations on possible ways Africa can develop and utilize

its abundant natural gas resources for domestic use and export

market earnings.

Africa is at the cross-road, a continent trying to emerge out of the

COVID-19 pandemic and global energy transition agenda to

become a leading continent for the both domestic and export

market.

According to the BP Statistical Review of World Energy (2019),

Africa held the world's fourth-largest proven reserves of natural gas

behind the Middle East, the Commonwealth of Independent States

(CIS), and the Asia Pacific region. The report revealed that Africa has

the world's largest production lifespan of technically recoverable

gas resources, estimated at 673 years and ahead of Latin America

(508 years) and Eurasia (296 years).

Industry experts believe that increasing investments across the

upstream sector will allow the continent to harness its about 620 tcf

of gas reserves - a critical resource for addressing energy poverty by

2030.

58

By Ndubuisi Micheal Obineme

Facts about African Gas Market

Ø Africa holds over 600 trillion cubic feet (tcf) of

proven gas reserves.

Ø Africa accounts for 7.1 percent of the global

gas reserves .

Ø Algeria, Egypt, and Nigeria remain the top

three natural gas producers and provide 80% of

the natural gas flows across Africa.

Ø Nearly 50 percent of Africa's proven gas

reserves are in the northern side of the region.

Ø While the western part houses around 30

percent of the resources. .

Ø Africa held the world's fourth-largest proven

reserves of natural gas behind the Middle East,

the Commonwealth of Independent States (CIS),

and the Asia Pacific region.

Ø Africa has the world's largest production lifespan

of technically recoverable gas resources,

estimated at 673 years and ahead of Latin

America (508 years) and Eurasia (296 years).


TOP STORY

TOP 10 AFRICAN COUNTRIES SITTING ON THE LARGEST NATURAL GAS RESERVES

COUNTRIES

RESERVES

1. Nigeria 206.53 Trillion Cubic Feet

2. Algeria 159.1 Trillion Cubic Feet

3. Senegal 120 Trillion Cubic Feet

4. Mozambique 100 Trillion Cubic Feet

5. Egypt 77.2 Trillion Cubic Feet

6. Tanzania 57.54 Trillion Cubic Feet

7. Libya 53.1 Trillion Cubic Feet

8. Angola 13.5 Trillion Cubic Feet

9. Congo 10.1 Trillion Cubic Feet

10. Equatorial Guinea 5 Trillion Cubic Feet

11. Cameroon 4.8 Trillion Cubic Feet

12. Sudan 3 Trillion Cubic Feet

13. MSGBC Region 40 trillion cubic Feet

THE ENERGY REPUBLIC


Algeria, Egypt, and Nigeria will remain the top three

natural gas producers and provide 80% of the

natural gas flows anticipated across Africa in 2022.

Northern and Western Africa dominate the

continent's natural gas market. Nearly 50 percent of

Africa's proven gas reserves are in the northern side

of the region, while the western part houses around

30 percent of the resources. Other African nations

have been rising as potential leading producers on

the continent.

In pursuit of the global push toward energy

transition, gas has become a critical energy

resource. Africa is home to over 600 million people

without access to electricity and 900 million people

without access to clean cooking. To address this, the

Nigerian government, for instance, has adopted

natural gas as its transition fuel -- a path key industry

leaders have advised other African countries

towards meeting their net-zero target.

In 2021, Nigeria flagged off construction for the

Nigeria Liquefied Natural Gas (NLNG) Train 7

project, which the Final Investment Decision (FID)

was taken in December 2019. The project when

completed will increase the capacity of the NLNG

existing six trains from 22 million to 30 million tpa.

Aside from the listed countries, Natural gas was

found in commercial quantities in several African countries, including Mauritania,

Côte d’Ivoire, Ghana, Gabon, Congo-Brazzaville, Angola, Namibia, Mozambique,

Tanzania, Rwanda, and Ethiopia. Mauritania: Mauritania holds 1.00 trillion cubic

feet (Tcf) of proven gas reserves as of 2017, ranking 67th in the world and accounting

for about 0.014% of the world's total natural gas reserves of 6,923 Tcf. Mauritania

has proven reserves equivalent to inf times its annual consumption.

Challenges:

Despite the abundant natural gas reserves in Africa, the lack of investment in gas

infrastructure continues to stand as a major challenge in Sub-Saharan Africa, unlike

in Northern Africa. Significant investments are needed to build trans-regional and

intercontinental pipelines, regionalize the African gas distribution market and

expand the continent's distribution networks for the export market. To achieve this,

it requires loads of investment.

Gas development in Africa is confronted with challenges around regulatory

uncertainty, insecurity, climate change as well as poor infrastructure. These factors

have been responsible for the unsanctioned of some key projects in countries like

Angola, Equatorial Guinea, Nigeria, and Senegal, among others.

"Projects in Africa are, however, historically seen as having increased risk and can be

delayed or go unsanctioned due to high development costs, challenges accessing

financing, issues with fiscal regimes, and other above-the-ground risks," Rystad

Energy said in a statement recently.

In April 2021, TotaEnergies withdrew all Mozambique LNG project personnel and

declared a force majeure due to rising insecurity in the north of the Cabo Delgado

province of the country.

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“Considering the evolution of the security

situation in the north of the Cabo Delgado

province in Mozambique, Total confirms

the withdrawal of all Mozambique LNG

project personnel from the Afungi site. This

situation leads Total, as operator of the

Mozambique LNG project, to declare force

majeure.

“TotalEnergies expresses its solidarity with

t h e g o v e r n m e n t a n d p e o p l e o f

Mozambique and wishes that the actions

carried out by the government of

Mozambique and its regional and

international partners will enable the

restoration of security and stability in Cabo

Delgado province in a sustained manner,”

TotaEnergies had said in a statement.

Similarly, in May 2021, Shell announced its

plans to exit from Nigeria's onshore and

shallow water exploration and production

business, citing insecurity. Recently, Seplat

Energy, an indigenous Nigerian company,

announced that it will be acquiring all the

onshore and shallow water assets of Mobil

Producing Nigeria Unlimited. This was

followed by TotalEnergies' plans to sell its

stakes in about 20 Joint Venture assets in

Nigeria. Although MPNU and TotalEnergies

have not given reasons for their plan to

exist, it may not be unconnected to security

challenges in Nigeria.

Aside from insecurity, the infrastructure

required to deepen gas utilization

domestically and drive export is lacking.

This is even more challenging as most gas

projects in Africa are greenfield with large

capital requirements. The majority of the

African countries that want to use gas for

power or industrial use do not have the

necessary infrastructure, especially

pipeline networks to supply and distribute

gas.

“

The gas industry in

Africa will require

$721bn between

now and 2035,

said Rolake Akinkugbe-Filani, an energy

and infrastructure expert in an op-ed in

2019, adding that "the significance of the

sector’s underfunded status cannot be

underestimated as natural gas constitutes

25 percent of the continent’s power

generation source.”

"Current levels of financing for the energy

sector in Africa as a whole are woefully

inadequate running at around $8bn years or

0.4% of the continent’s GDP (African

Development Bank).

"LNG projects alone will require at least

$80bn in investments over the next decade,

pipeline infrastructure another $20bn, and

gas-to-power projects another $8bn in

investments," Akinkugbe-Filan stated.

At the current rate of investment in energy

infrastructure in Africa, including gas-topower,

it may take the continent additional

50 years to meet the 2030 universal access

to energy target, according to the United

Nations Development Programme (UNDP).

Also, most of the gas projects that receive

funding on the continent are exportoriented

projects, said Akinkugbe-Filani,

citing commercial viability as the reason.

"Investment in energy infrastructure to

serve domestic consumer and commercial

markets is a lot more challenging as

operational and regulatory risks undermine

the willingness of investors to take risks,"

she noted.

Another challenge hindering gas

development in Africa is the global push

toward energy transition. As a result of this,

the sanctioning of some projects has been

delayed because of funding issues.

Highlighting the need for leading and

emerging African hydrocarbon producers to

establish capital attractive regimes that can

help increase the participation of investors

and international majors for industry

expansion, the African Energy Chamber

hosted a webinar to discuss the challenges

and opportunities within Africa’s energy

sector and the importance of collaboration

amongst African stakeholders to boost the

market growth.

During the webinar, the panelists discussed

the challenges and opportunities within

Africa’s hydrogen and oil and gas sectors,

debating investment, infrastructure, and

how Africa can emerge as the preferred

supplier to European markets in the wake of

the Russia-Ukraine crisis.

“

Africa has the money

to build its

infrastructure, it is

getting half a billion

US dollars by selling

oil and gas per day.

We just need to direct

that money towards

infrastructure

development.

“At the same time, Africa also needs to

improve its taxes on energy to attract

investments and to avoid majors exiting the

market. Chevron and other big firms are

leaving the West African market because

fiscal terms are not making sense, there are

high taxes,” stated Leoncio Amada Nze

Nlang.

Verner Ayukegba added, “Without peace in

African hydrocarbon producing countries,

there won’t be any deals. Peace is important

and with it, we will see more oil and gas

companies that have a strong base across

the continent expanding their operations in

oil and gas-rich countries. We are so happy

South Sudan has reached a deal to ensure

security and this means more energy deals

will be signed. Moreover, we need to de-

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politicize energy deals to ensure long-term

energy partnerships are signed.”

Additionally, participants also analyzed the

impact of the Russia-Ukraine crisis on the

African oil and gas market and the

possibility of Africa increasing energy

exports to Europe.

Grace Orife, explained that,

“

We need private

investors and African

investors because

Europe is not going to

give us the money to

accelerate

infrastructure

deployment.

“Looking at the huge gas reserves Africa

has, domestic gas supply should be a

priority before we supply to Europe and

other markets considering we have 600

million people across the continent that do

not have access to energy. With gas also

considered clean energy, Africa should

utilize it to address energy poverty and

decarbonize at the same time.”

Abdur Rasheed extended on this notion,

adding that “Since Africa is the closest to

Europe, why are we not the priority market

to get gas to Europe? The challenge we

have seen regarding Africa not getting gas

to Europe is the lack of infrastructure.

However, Africa is already exporting gas to

Europe. What we need are more

investments and transmission systems. We

are glad the Niger, Nigeria, and Algeria

pipeline deal has been signed. This is

something that should have been done

years ago. Underinvestment has restrained

Africa to expand to Europe. Nigeria and

other African countries that have high gas

reserves need to ramp up infrastructure

development to be able to increase exports

to Europe.”

Finally, the webinar also highlighted the

importance of collaborations such as the

Team-Energy Africa initiative, an initiative

between the AEC, the United Nations

Economic Commission for Africa, and the

Secretariat of Sustainable Energy for All,

that will launch in Kigali, Rwanda from 17-

19 May 2022. With the Team-Energy Africa

initiative launching with $1 billion in

funding, the project will play a key role in

accelerating electrification in Africa to

ensure the achievement of sustainable

development goals.

Growth opportunities

A report published by African Coalition for

Trade & Investment in Natural Gas

(ACTING), revealed that Sub-Saharan Africa

has exploited only 5% of its total identified

gas-to-power (GTP) potential of 400GW.

Based on under-construction projects, pre-

FID projects and existing thermal plants

planned to be converted, the ACTING report

estimated that installed and grid-connected

GtP capacities could increase by 55% in Sub-

Saharan Africa by 2025 and reach

approximately 28 GW. New GtP markets will

certainly include Senegal and South Africa,

likely include the Democratic Republic of

Congo and Botswana and potentially

include Namibia by 2030.

Gas is seen as the energy of the future and

African countries like Algeria, Angola, Egypt,

Mozambique, and Nigeria, among others,

have been playing key roles in global gas

exploration and production.

There are enormous growth opportunities

in Africa's gas sector. In Mozambique, the

country’s gas resources have the potential

to meet both regional and international gas

demand. According to AEC's 2022 outlook,

supply-demand levels between 2022-2025

indicate that there is sufficient Liquefied

Natural Gas (LNG) supply to satisfy growing

demand as new projects come on onstream

in 2022 such as the Coral Floating Liquefied

Natural Gas project (FLNG) in Mozambique.

The Coral FLNG, comprising approximately

450 billion cubic meters of gas, is located in

the Rovuma Basin off the coast of

Mozambique. Upon completion, it will

produce 3.4 million tons per annum (mtpa)

of gas for export to Europe and Asia in 2022.

There is also the TotalEnergies’ 12.8 mtpa

Mozambique LNG project and Eni and

ExxonMobil’s 15.2 mtpa Rovuma LNG.

These projects have the potential to make

Mozambique a competitive gas exporter in

the world.

The growth of Mozambique’s gas market in

2022 and going forward will be a gamechanger

for Africa’s hydrocarbon market

and "will help set the continent on a

trajectory towards becoming a global

energy hub."

"At a time when gas production across

Africa needs to ramp up to meet growing

energy demand, factors such as inadequate

funding in new E&P activities and

diminishing production in legacy projects is

challenging the ability of African

hydrocarbon producing countries to expand

gas output. However, large-scale projects

and investments made in Mozambique –

with its 100 trillion cubic feet of reserves –

can help expand Africa’s gas market," AEC

said in a statement recently.

Citing the Energy for Growth Hub, AEC

stated in a statement recently, that

Mozambique’s gas could rake in $50 billion

in foreign investments and help the

government to generate $95 billion in

revenues over the next 25 years by

formulating the right policies to attract

investments as well as maintaining stable

political environments.

“Mozambique’s gas reserves have the

potential to address energy poverty across

the entire southern African region by

helping neighboring countries such as

Zimbabwe, Botswana, Malawi, and South

Africa meet gas demands. However, political

instability in the country and a lack of

investment in enabling infrastructure will

need to be addressed for Mozambique

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to become one of the top-10 global LNG

exporters,” AEC statement quoted the

Executive Chairman of AEC, NJ Ayuk, as

saying.

Also, Equatorial Guinea is in pursuit of

becoming a regional gas hub, with an

increasing scale of project developments

and building of regional partnerships to

drive socio-economic development both

domestically and regionally.

“

We are promoting

investments not only

in exploration but also

in transportation

and the downstream

sector.

“What is happening in Europe has given us

a new view of how important hydrocarbons

are for our continent. Gas is going to be an

important part of Africa’s energy mix and

central Africa will play a key role in ensuring

energy security across the continent. That

is why we are starting to work together with

the DRC, Chad, and Guinea to create a gas

market and develop the infrastructure to

transport gas and methanol.

"My priority remains our Gas Mega Hub

and we are working with Nigeria and

Cameroon to make Punta Europa the

central area of processing and exporting

gas. Hopefully, by October this year, we will

be announcing new agreements on this.

The revolution from oil and gas is

happening and that is why we are working

with our neighbors to ensure we capture

the trapped gas," said Minister of Mines

and Hydrocarbons, Equatorial Guinea,

Gabriel Mbaga Obiang Lima during a

roundtable interview hosted by AEC,

recently.

For some years now, ExxonMobil has been

trying to adjust its position in the Zafiro

field. Commenting on this, he said, "Zafiro

has been a jewel for us and provides

revenue for Equatorial Guinea. The issue

that ExxonMobil has is that its contract

expires in 2025. When the contract expires,

that asset will go to the state. What we are

doing at this stage is engaging with

ExxonMobil to see if we can have a mutual

agreement that will maintain their

investment and exploration. Regarding

Fortuna, we all recognize the challenge of

FLNG.

H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons, Equatorial Guinea

We have different parties interested and are

working on possible projects. By October I

will be able to be more specific, but we

believe that Equatorial Guinea will go into

FLNG."

In the Democratic Republic of Congo (DRC,

there are opportunities for both regional

players and global investors. DRC has

approximately 30 billion cubic meters of

methane and gas reserves. However, not

much has been done to develop this field.

The government is making effort to change

the status quo. It has started by signing

agreements with regional players, including

Equatorial Guinea to begin a gas revolution

in the country.

Similarly, in Nigeria, there are big

opportunities for investors in the gas sector.

The country has about 209 tcf of proven gas

reserves. This is according to the Nigerian

U p s t r e a m P e t r o l e u m R e g u l a t o r y

Commission (NUPRC). With the country's

investment-driven Petroleum Industry Act

(PIA), which came into effect in August

2021, and the government's drive to

deepen domestic utilization of gas, many

industry experts see Nigeria as an

investment destination for gas.

“In line with our aspiration towards

becoming a net exporter of petroleum

products, opportunities abound in the

rehabilitation of our existing refineries as

well as the construction of greenfield

condensate refineries.

“As we strive to deepen domestic gas

u t i l i zation, i t h a s c re a ted m o re

opportunities in the downstream sector,

especially in LPG and CNG plants across the

country.

“

There are also

opportunities in the

pipeline and storage

tank construction; as

well as developing

Shipping Capacity,

said the Chief Executive Officer/Group

Managing Director of the NNPC, Mallam

Mele Kyari, at the 2021 Nigerian Oil and Gas

Opportunity Fair (NOGOF).

Forecast

According to the BP statistical review of

World Energy 2019, gas production in Africa

could reach 440 billion cubic meters (bcm)

by 2035, representing between 9 percent –

12 percent of the total global supply. New

research by Rystad Energy forecasts that

Africa's gas will reach 470 billion cubic

meters (Bcm) conservatively, by the late

2030s, equivalent to about 75 percent of the

expected amount of gas produced by Russia

in 2022.

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The continent is forecast to increase its gas

output from about 260 Bcm in 2022 to as

much as 335 Bcm by the end of this decade.

Rystad noted that if oil and gas operators

decide to accelerate their gas projects on

the continent, near and mid-term natural

gas production from Africa could exceed

470 bcm.

As a result of the ongoing invasion of

Ukraine by Russia, the European Union

March announced its plans to cut Russian

gas imports by two-thirds by the end of this

year alone. Russia is the dominant natural

gas supplier to Europe, with an average of

about 62 percent of overall gas imports to

the continent over the past decade,

according to Rystad Energy. With Europe

looking for an alternative gas supply, Africa

stands to benefit.

"African nations that have historically been

gas suppliers to Europe are well placed to

scale up their exports. Africa’s advantage is

that it already has existing pipelines

connected with the wider European gas

grid. Current pipeline exports from Africa to

Europe run through Algeria into Spain and

from Libya into Italy.

Talks of long-distance pipelines connecting

gas fields in Southern Nigeria to Algeria via

the onshore Trans Saharan Gas Pipeline

(TSGP) and the offshore Nigeria Morocco

Gas Pipeline (NMGP) have picked up in

recent months. While the TSGP aims to

utilize existing pipelines from Algeria to tap

into European markets, NMGP aims to

extend the existing West Africa Gas Pipeline

(WAGP) to Europe via West African coastal

nations and Morocco. Further afield,

African LNG exports have predominantly

come from Nigeria and Algeria, with

smaller volumes from Egypt, Angola, and a

fraction from Equatorial Guinea. In

addition, large-scale discoveries offshore in

M oza m b i q u e , Ta n za n i a , S e n e ga l ,

Mauritania, and South Africa have the

potential to yield additional natural gas

exports once developed," Rystad Energy

said in a statement.

"Europe is now considering how gas-rich

African nations can be helped to scale up

production and exports in the years to

come. The European Union’s decision

earlier this year that all-natural gas

investments are equivalent to investments

in “green” energy signals that African gas is

considered sustainable. The supply crisis

driven by security interests may push

Europe to fund projects that will also help

with energy affordability back home. For

instance, Europe could be a key financer of

the proposed $13-billion TSGP project.”

Aside from potential major exports to

Europe, gas demand for domestic use in

Africa is expected to rise, as countries on the

continent commit to carbon neutrality. This

demand will be driven by industrialization,

population, and expansion in economic

activities. By 2050, about half of global

population growth is expected to occur in

Africa. Specifically, the population of sub-

Saharan Africa is projected to double by

2050, according to the United Nations (UN).

Africa has been a consistent gas exporter to

Europe, with an average of 18 percent of its

gas production exported to Europe.

However, the proposal by the European

Commission, the executive arm of the

European Union in February to classify

some natural gas as green investments

could be a turning point for gas

development in Africa. With oil majors

exiting Russia, Africa may be their next

destination as Europe looks for an

alternative to Russian gas.

“A rapid population increase in Africa is

anticipated even if there is a substantial

reduction of fertility levels in the near

future. Regardless of the uncertainty

surrounding future trends in fertility in

Africa, the large number of young people

currently on the continent, who will reach

adulthood in the coming years and have

children of their own, ensures that the

region will play a central role in shaping the

size and distribution of the world’s

population over the coming decades,” the

UN says.

Africa is potentially a big gas market but

needs to fund its build-up of infrastructure,

including railway lines, refineries, and

pipelines to develop its gas resources.

“Private sector-led investment initiatives

will ensure sufficient capital supply,

however, governments should commit to

funding banks to fund energy projects. The

political will to fund banks will enable other

investors to put their money in the sector.

The MoU signed by Afreximbank and APPO

for the energy bank is a great start and will

act as a blueprint on how Africa can

collectively work to address the lack of

infrastructures such as refineries and

pipelines that is pushing Africa to be a net

exporter of refined petroleum despite

having massive oil and gas reserves.

The AFC is seeking to participate in the

development of refineries such as the

Cabinda in Angola," said Vice President of

Natural Resources at Africa Finance

Corporation (AFC), Taiwo Okwor, at a panel

discussion hosted at the 8th African

Petroleum Congress and Exhibition (Cape

VIII), which took place from 16 – 19 May

2022, in Luanda, Angola.

In conclusion, Africa's LNG export to grow

further post COVID-19, according to Gas

Exporting Countries Forum (GECF) analysis.

Africa accounts for 11% of global LNG

exports and its LNG exports have increased

by more than five million tonnes in the last

five years.

GECF forecasted that between 2021 and

2023, around 200 Mtpa of LNG projects are

targeting FID with around 23 Mtpa in Africa.

According to GECF, Africa’s GDP is expected

to rebound to 4% in 2022. While Gas

production will start to recover post-COVID-

19 and will continue to grow further in 2022.

GECF’s outlook also highlighted that 26

Mtpa of new LNG capacity is expected to be

commissioned in Africa between 2021 and

2027 which represents 17% of the global

capacity addition during this period.

GECF sees a bright future from LNG exports

from Africa to meet the growing energy

demand and is supporting Africa’s LNG

industry through gas supplies from its

member countries.

"Africa is well-positioned to supply the

emerging and potential market. The

continent is an attractive destination for

LNG business as Nigeria, Ghana, Ivory Coast,

Morocco, Namibia, and South Africa are

potential markets.

"Africa has great potential for natural gas

and renewable energy sources. Its

economies are growing fast and there is a

cordial relationship going on between Africa

and the global community," GECF added.

“

THE ENERGY REPUBLIC


As natural gas demand

increases worldwide,

Africa and its gas

resource base will

play an increasing

role in the supply chain”.

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CENTURION INTERVIEW

TER: Based on your perspective, what's the

current status of African Infrastructure

development especially in the oil and gas

industry?

Oneyka: Infrastructure development

especially in the oil and gas industry?

Inadequate infrastructure is the biggest

obstacle in Africa’s oil and gas industry. Africa

lags in key infrastructure for oil and gas

compared to the rest of the world. The main

reason for this, other than lack of financial

capacity, is the low success rate of oil and gas

projects. Despite several oil refinery projects

being announced regularly, most of the

projects do not concretize. Low success leads

to a significant financial burden on

infrastructure developers and dampens the

continent’s investment climate.

TER: Please could you also highlight the

untapped potentials in infrastructure

development in Africa?

Oneyka Cindy Ojogbo, Centurion Interna onal Director and A orney

“Several Areas can be Tapped Into to

Improve Africa's Oil and Gas

Infrastructure” - Oneyka Ojogbo

The Energy Republic talks to Oneyka Cindy Ojogbo, Head of

Centurion in Germany, on the tropical issues in developing

major infrastructural projects in Africa's oil and gas industry.

In her words, she also provided an overview of how Centurion

Plus is helping investors with the necessary support needed to

doing business in Africa.

O n eyka i s re s p o n s i b l e fo r t h e

management and operations of

Centurion Plus in Germany and the wider

Europe. She is a firm believer in the

Centurion Plus on-demand legal service,

which is poised to transform the legal

industry.

Centurion offer improved alternative working

solutions to businesses and lawyers by

providing bespoke, cost-effective legal

service to cater to client's unique needs. She

is confident that flexible legal practice as

championed by Centurion is the inevitable

future of lawyering.

Oneyka: Several areas can be tapped into to

improve Africa's oil and gas infrastructure.

These include expanding the capacity of

existing pipelines, constructing new

pipelines, and developing export terminals,

especially in oil-producing nations. African

countries without their reserves will need to

develop infrastructure for the importation of

oil and natural gas to support local demand,

which will require sufficient investment in

upstream oil and gas infrastructure.

All countries will need to invest in

downstream infrastructures, such as power

transmission and distribution capacity for

gas-powered electricity in Africa’s upcoming

gas industrialization.

TER: What would you recommend as a

solution to bridge the gap?

Oneyka: The key to infrastructure

development will be to mobilize investment

into the sector. The key investment will be

directed to countries that aim to create a

domestic oil and gas economy, countries with

sizable enough economies that can justify the

expensive infrastructure investment. The

level of liberalization of the oil and gas

industry is important.

More needs to be done especially by low oil

and gas producing countries to authorize

private-sector participation in the sector. In

doing so, there also needs to be clear legal and

regulatory frameworks that de-risk private

sector investment.

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CENTURION INTERVIEW

Lastly, transport infrastructures need to be

improved to facilitate infrastructure

development of the oil and gas sector.

TER: Funding is another tropical issue in

developing major infrastructural projects

in Africa. What would you recommend as a

Business Model to attract Foreign Direct

Investment (FDI) in funding these projects

across Africa?

Oneyka: Organizational strategies are

important to attracting FDI, there should be

clear mandates to attract FDI. There should

be ease of project implementation for the

foreign investors, clear communication of

the project’s needs as well as effective

investment facilitation, which means

having a transparent process for permits,

licenses, and application processes with

clear timeframes.

Lastly, post-investment services should be

provided to investors to encourage them to

expand and deepen their operations in the

location.

TER: What kind of Public-Private Sector

Partnership is needed to raise capital

within the Continent?

Oneyka Cindy Ojogbo

Oneyka: There is a wide variety of PPPs

that can raise capital. It all depends on the

extent of involvement of each sector, the

risk taken by the private party, and the

amount of capital they can offer.

Moving forward, international financial

institutions and governments across

Europe and North America have made it

clear to stop financing fossil fuel projects

to focus more on renewable energy

investments. This presents a new

challenge in funding the African

hydrocarbon industry. What would you

recommend as an alternative funding

model for African hydrocarbon resources?

Oneyka: There needs to be greater

cooperation and collaboration among

African oil and gas producing countries if

they wish to survive the challenges posed

by the transition agenda. African states and

private sectors should also band together

to establish energy banks focused on

funding African energy projects.

TER: What innovative strategies should be

implemented in establishing an African

Energy Bank?

Oneyka: For one, financing local oil and gas

companies that international financing

agencies have refused to finance. This

boosts both new and existing project

developments, also ensuring reliable

financing channels for oil and gas to quickly

improve energy access to Africans, while

still creating critical capital opportunities for

renewable energy projects.

TER: How is Centurion Plus working to

strengthen German-Africa Business

relations as well as bring foreign investors

to the Continent?

Oneyka: Centurion Plus provides German

and other foreign investors with support in

navigating the tax, regulatory, and

investment requirements needed to do

business in Africa, this helps with an

enabling business environment that attracts

foreign investors.

TER: How would Women entrepreneurs

contribute to Infrastructure development

in Africa?

Oneyka: Africa leads the world in terms of

the number of female business owners.

Women in Africa are more likely than men to

be entrepreneurs.

This advantage can be used favorably by

targeting female entrepreneurs and

pushing them into profitable sectors, which

will allow infrastructure building to occur

throughout their communities.

TER: What opportunities does it present to

Women in Business?

Oneyka: This opens up many local and

international financing opportunities for

women in business such as microfinancing,

international financing corporations as well

as independent trusts.

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AFRICAN ENERGY STORIES

Africa Boosts Upstream Activities

to Amplify Oil and Gas Production

African hydrocarbon producing

countries are increasing oil and

gas licensing rounds to be able to

stabilize supply of hydrocarbons in

years to come to meet growing energy

demand as output in legacy projects

declines.

The introduction of more oil and gas

exploration and production licensing

rounds across Africa will enable the

continent to make new and significant

discoveries, increase the production of

hydrocarbons, as well as fully utilize the

continent’s vast array of energy

resources to address energy poverty

and accelerate economic growth.

Although the production of oil and gas

in Africa has been rising over the past

two decades, declines are anticipated

in the coming years due to output

reductions in legacy projects, a lack of

new exploration in recent years and

inadequate investments across the

value chain in leading hydrocarbon

producing countries such as Nigeria,

Algeria, Libya, Angola and Egypt.

On the gas front, despite Africa having

sufficient supply to meet 2022 – 2023

demand owing to new projects such as

the Mozambique Coral Floating

Liquefied Natural Gas (LNG) and

Nigeria’s LNG Train 7 projects coming

online, production declines in Algeria,

Nigeria, Libya and Egypt will strain the

supply chain from 2025 onwards.

Egypt, for example, is expected to

record a decrease in production from

74 billion cubic meters (bcm) in 2022 to

50 bcm by 2030 unless major

discoveries are made and quickly brought

online.

On the other hand, the oil sector will also

witness production declines with Algeria,

one of Africa’s leading oil producers, already

starting to record output reductions.

Nigeria, the biggest producer of crude oil in

Africa, will also record a decline from 2023

whilst production in Sudan and South Sudan

and other west African countries will also be

affected.

In order for Africa to mitigate these

declines, the continent will have to boost

investments within the upstream sector.

Recognizing the need to expand upstream

activities, many countries across the

continent have introduced bid licensing

rounds across both emerging and frontier

markets, creating the opportunity for

regional and international companies to

participate in high potential basins.

Notably, a 2021 licensing round introduced

by the Tunisian Ministry of Energy Ministry

in which contracts are expected to be

awarded in 2022 for four oil exploration

licenses. Additionally, Angola, through the

National Agency of Petroleum, Gas and

Biofuels (ANPG) also opened bidding in

2021 for tenders in Blocks 11, 12, 13, 27, 28,

29, 41, 42 and 43 in the Namibe Basin, and in

Block 10 in the Benguela Basin.

In addition, the results of some 14

exploration licensing rounds expected to be

announced in 2022 across the continent are

a testimony of increased focus by African

hydrocarbon producing countries to

increase activities within the upstream

sector.

Other licensing rounds planned to be

introduced in 2022 and 2023 include those

in Ivory Coast, Senegal, Algeria, Congo,

Sudan, South Sudan, Somalia, Uganda and

Kenya.

“Increasing activities within Africa’s

upstream segment will boost oil and gas

production and enable the continent to fully

monetize its energy resources for economic

growth while at the same time meeting

demand in other regions such as Europe and

Asia.,” stated Tomás C. Gerbasio, Strategy

and Business Development Director, African

Energy Week adding that, “What Africa

needs now is to develop capital-attractive

regimes, introduce more licensing rounds

and to ramp up investments in new

exploration and production projects.”

The AEC’s annual investment summit, the

African Energy Week (AEW), which will take

place in Cape Town from 18 – 21 October

2022, will discuss measures restraining

Africa from expanding its oil and gas

upstream market and how they can be

a d d r e s s e d . A E W 2 0 2 2 w i l l h o s t

presentations, high-level meetings and

panel discussions on how emerging and

leading hydrocarbon producing countries in

Africa can attract investment to boost

exploration and production activities. AEW

will unite governments, investors and

companies within the continent’s entire oil

and gas market and thereby provide a

platform for oil and gas licensing rounds and

exploration and production deals to be

discussed and signed.

AEW 2022 is the AEC’s annual conference,

exhibition and networking event. AEW 2022

unites African energy stakeholders with

investors and international partners to drive

industry growth and development and

promote Africa as the destination for energy

investments. Key organizations such as the

African Petroleum Producers Organization,

as well as African heavyweights including

Equatorial Guinea and Nigeria, have

partnered with AEW, strengthening the role

the event will play in Africa’s energy future.

67

OIL AND GAS REPUBLIC I SPECIAL EDITION


the benefit of Nigeria and the entire subregion,”

Kyari said.

Temitope Shonubi, Executive Director

Sahara Group, said: “WAGL has successfully

operated two mid-sized LPG Carriers MT

Africa Gas and MT Sahara Gas in the region

in keeping with global standards, delivering

over 6 million CBM of LPG across West

Africa. With the new vessels we are set to

promote and lead Africa’s march towards

energy transition.”

L-R: Nigeria’s Ambassador to South Korea, Ali Magashi; Group Mangaing Director, NNPC, Mele Kyari;

Executive Director, Sahara Group and Chairman, WAGL Energy Limited, Temitope Shonubi and Group

Executive Director, NNPC Gas and Power, Ahmed Abdulkabir at the Hyundai Shipyard, Ulsan, South Korea

NNPC, Sahara Group Invest $300m in

Gas Carriers to Drive Africa’s Energy

Transition

The Nigerian National Petroleum

Company Limited (NNPC) and

l e a d i n g e n e r g y a n d

infrastructure conglomerate, Sahara

Group, took delivery of two 23,000

CBM Liquefied Petroleum Gas (LPG)

vessels at the Hyundai MIPO Shipyard

in Ulsan, South Korea, with plans to add

10 vessels in 10 years to enhance

Africa’s transition to cleaner fuels.

The new vessels, MT BARUMK and MT

SAPET have increased NNPC and Sahara

Group’s joint venture investment to

over $300million, approaching the JV’s

$ 1 b i l l i o n g a s i n f r a s t r u c t u r e

commitment by 2026.

The fleet previously comprises MT

Sahara Gas and MT Africa Gas. All the

four vessels were built by Hyundai

MIPO Dockyard, a foremost global

manufacturer of mid-sized carriers.

WAGL Energy Limited, the JV company

between NNPC and Oceanbed (a

Sahara Group Company) is driving

NNPC’s five-year $1 billion investment

plan announced in 2021 to accelerate

the Nigerian 'Decade of Gas' and Energy

transition agenda over the period.

NNPC’s GMD, Melo Kyari disclosed to

the guests that an order of three

additional new vessels was being

finalised, adding,

“We have a target of delivering 10 vessels

over the next 10 years. The NNPC and our

partners stand out with integrity in our

energy transition quest and our

commitment environmental sustainability

is unwavering.”

MT BARUMK and MT SAPET are WAGL and

Sahara Group’s injection into the JV. WAGL is

shoring up its gas fleet and terminal

infrastructure, while Sahara Group

continues to make remarkable progress in

the construction of over 120,000 metric

tonnes of storage facilities in 11 African

countries, including Nigeria, Senegal,

Ghana, Cote d’Ivoire, Tanzania, and Zambia,

among others.

Kyari said the vessels were critical to driving

the Federal Government’s commitment to

the domestication of gas in Nigeria through

several initiatives and increasing seamless

supply in compliance with the mandate of

President Muhammad Buhari.

The initiatives – the LPG Penetration

Framework and LPG Expansion Plan are

geared towards encouraging the use of gas

in households, power Generation, auto-gas

and industrial applications in order to attain

5 Million Metric tonnes of LPG consumption

by 2025.

“ T h i s i s a n o t h e r e p o c h - m a k i n g

achievement for the NNPC and Sahara

Group, and we remain firmly committed to

delivering more formidable gas projects for

His Excellency, Ali Magashi, Nigeria’s

Ambassador to South Korea who

represented the Federal Government,

noted that President Muhammad Buhari

deserved commendation for the Petroleum

Industry Act (PIA) which he said would

reposition the NNPC to explore more

projects with partners like Sahara Group.

Also in attendance were: Ahmed

Abdulkabir, NNPC Group Executive Director,

Gas and Power, Tombomieye Adokiye,

Group Executive Director, NNPC Upstream,

Olalekan Ogunleye, Deputy Managing

Director, NLNG, Mr. Bala Wunti, Group

General Manager, National Petroleum

Investment Services (NAPIMS), Engr. Farouk

Ahmed, Chief Executive Officer, Nigerian

Midstream and Downstream Petroleum

Regulatory Authority (NMDPRA), Mr.

Abiodun Adeniji, NMDPRA ED, Finance,

Wale Ajibade, ED, Sahara Group and WAGL

alternate Chairman, Emmanuel Ubani,

Managing Director, WAGL, Family members

of the late NNPC GMD, Dr. Maikanti Baru,

Mrs. Titilola Shonubi and Mrs. Abosede

Ajibade, among others.

“BARUMK” was derived from the

combination of the name and initials of the

late NNPC GMD, Dr. Maikanti K. Baru, in

fond memory of his immense support

towards the Gas development in Nigeria.

“SAPET” is named after the Sahara – Petroci

(the Ivorian National Oil Company) JV LPG

Company (SAPET Energy SA.), currently

constructing phase one of a 12,000MT LPG

storage facility in Abidjan, with expansion

plans to achieve 30,000MT in phase two.

The JV emerged from WAGL’s trading

relationship with PETROCI, dating back to

2014.

In Cote D’Ivoire, Sahara Group has invested

over $405 million since 2014 into facilitating

the supply of LPG to give over 26 million

Ivorians access to safe and reliable access to

the product.

68

NIGERIAN GAS ASSOCIATION I SPECIAL EDITION


Kachikwu Calls

for Regional

Collaboration

To Ensure Just

Energy Transition

in Africa

FEC Approves NNPC, ECOWAS

Deal on Nigeria-Morocco Gas

Pipeline

T he

he Federal Executive Council

(FEC) has given approval for the

N N P C t o e n t e r i n t o a n

agreement with ECOWAS for the

construction of the Nigeria-Morocco

Gas Pipeline.

Minister of State for Petroleum

Resources, Timipre Sylva, briefed State

House correspondents after the FEC

meeting presided over by Vice

President Yemi Osinbajo on Wednesday

at the Presidential Villa, Abuja.

Mr. Sylva said the project was still at the

point of the front-end engineering

design after which the cost would be

determined.

The pipeline would traverse 15 West

African countries to Morocco and

Spain.

“The Ministry of Petroleum Resources

presented three memos to Council.

“The first memo, Council approved for

the NNPC Ltd to execute MoU with

ECOWAS for the construction of the

Nigeria-Morocco Gas Pipeline.

“This gas pipeline is to take gas to 15

West African countries and to Morocco

and through Morocco to Spain and

Europe,’’ he said.

The minister said the council also

approved the construction of a

switchgear room and installation of

power distribution cables and

equipment for the Nigeria oil and gas park in

Ogbia, Bayelsa, in the sum of N3.8billion.

He said the park was to support local

manufacturing of components for the oil

and gas industry.

More so, Mr. Sylva said that FEC approved

various contracts for the construction of an

access road with bridges to the Brass

Petroleum Product Deport in Inibomoyekiri

in Brass Local Government in the sum of

N11billion plus 7.5 percent VAT.

The News Agency of Nigeria (NAN) reports

that Nigeria-Morocco Gas Pipeline was

proposed in a December 2016 agreement

between the Nigerian National Petroleum

Corporation (NNPC) and the Moroccan

Office National des Hydrocarbures et des

Mines (National Board of Hydrocarbons and

Mines) (ONHYM).

The pipeline would connect Nigerian gas to

every coastal country in West Africa (Benin,

Togo, Ghana, Cote d’Ivoire, Liberia, Sierra

Leone, Guinea, Guinea-Bissau, Gambia,

Senegal, and Mauritania), ending at

Tangiers, Morocco, and Cádiz, Spain.

Dr. Emmanuel Ibe Kachikwu

T

Chairman of AfricEnergy and

ambassador for Africa Oil Week, His

Excellency Dr. Emmanuel Ibe

Kachikwu has called for regional

collaboration between the private and

public sectors to work in synergy and focus

on ensuring that Africa has a just energy

transition.

He made this known at the Nigeria National

Upstream Planning Meeting hosted by the

Africa Oil Week (AOW) in anticipation of the

African Oil Week scheduled to hold in Cape

Town, South Africa, in October 2022.

He urged the private and public sector

investors to remember the continent's vast

oil and gas reserves and to invest in African

energy. As the world continues to make

efforts to shift away from oil and gas

i nvestment, A f r i c a r e q u i r e s fa i r

consideration in the transition, which

includes continued investment in the

hydrocarbon sector. “The development of

several African countries is dependent on

the energy sector's development and

revenues and we cannot move at the same

pace with advanced countries.” Said Dr.

Kachikwu

He emphasized the importance of African

countries prioritizing their people and their

needs and not allowing intervention or

impediment. He stressed the importance of

African countries banding together to

achieve a just energy transformation at

their own pace while bringing all of their

citizens along.

69

OIL AND GAS REPUBLIC I SPECIAL EDITION

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The Energy Republic June Edition 2022

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