LNG

Woodside Energy, the operator of the Northwest Shelf and Pluto LNG plants in Western Australia, has received a boost for one of its main overseas ventures, the Sangomar project offshore Senegal in West Africa, with the sail-away from Singapore of the “Léopold Sédar Senghor” floating production storage and offloading (FPSO) facility.

Kosmos Energy, the Dallas-based exploration and production company, posted a net fourth-quarter loss as it continued to make progress on the floating LNG export projects being developed with BP of the UK offshore Mauritania and Senegal in West Africa.

“The Greater Tortue Ahmeyim project located offshore Mauritania and Senegal remains on track with Phase 1 approximately 25 percent complete,” stated Kosmos.

“Pre-FEED work is ongoing for Phases 2 and 3 and these phases are expected to expand capacity to almost 10 MTPA of LNG export capacity,” added the US company.

Kosmos said that for the final three months of 2019 its losses came to $35.7 million compared with a profit of $185.5M in the same three months of 2018.

Oil and gas revenues in the quarter came to $450M versus $301M in the 2018 quarter.

Annual oil and gas revenues amounted to $1.49 billion compared with $886.6M in 2018.

Kosmos said one highlight happened after the fourth quarter with the signing on the 11th of February 2020 with its partners, the state energy companies of Senegal and Mauritania, of a Sale and Purchase Agreement (SPA) with BP Gas Marketing for 2.45 million tonnes per annum of LNG from Phase 1 of the project for an initial term of up to 20 years.

“Signing the SPA has allowed Kosmos to book approximately 100 million barres of oil equivalent of proven reserves associated with the project,” said the US company, listed on the New York Stock Exchange.

Kosmos announced during the fourth quarter that the Orca-1 exploration well made a major gas discovery offshore Mauritania in the Bir Allah area. 

The company noted that Orca was the largest deepwater hydrocarbon discovery in 2019 and the results continue the 100 percent success rate from nine wells targeting the inboard gas trend in Mauritania and Senegal.

“It was a strong year for Kosmos with the business generating approximately $250 million of free cash flow, the third successive year of material organic cash generation,” said Chief Executive Andrew G. Inglis. 

“It was also one of the most active years in the company’s history with over 1.7 million man hours operating five wells,” added the CEO.

“Our exploration and appraisal program delivered five successes from seven wells drilled and we continue to make excellent progress with our developments in Mauritania and Senegal with Tortue Phase 1,” stated Inglis.

Kosmos has other oil and gas operations offshore the US Gulf of Mexico, as well as Ghana and Equatorial Guinea in West Africa.

Excluding Mauritania and Senegal, the company said it expected to spend around $325M to $375M in 2020.

In Mauritania and Senegal, total 2020 capital expenditure for Kosmos will be about 30 percent working interest, or around $250M, and is expected to be funded from proceeds from the previously announced and ongoing farm-down process, whereby a stake is being sold by Kosmos.

German technology has been chosen for the first floating liquefaction and export plants being developed offshore Senegal and Mauritania in West Africa by BP of the UK and Dallas-based Kosmos Energy.

Kosmos Energy, the main shareholder with BP of the UK in floating liquefied natural gas projects offshore Mauritania and Senegal in West Africa, said the latest well drilling in the Greater Tortue-Ahmeyim field may lead to an expansion of resource potential and estimates and to more LNG production.

Kosmos, based in Dallas, Texas, said its latest drilling in the Greater Tortue Ahmeyim-1 well (GTA-1), encountered approximately 30 metres of net gas pay in the high-quality Albian reservoir.

The Greater Tortue-Ahmeyim LNG project is on track to deliver first gas by mid-2022 and the well, which has been designed as a future producer, will be used to further optimize the development drilling plans for the BP-operated project.

“The GTA-1 well confirms our expectation that the gas resource at Greater Tortue-Ahmeyim will continue to grow over time and could lead to further expansion of this world-scale LNG project with 10 million tonnes per annum of production,” said Kosmos Chairman and Chief Executive Andrew G. Inglis.

“In addition, Kosmos’s process to sell down its interest to 10 percent has received considerable interest from the industry, with initial bids expected over the summer, and a transaction conclusion anticipated by year-end,” added Inglis.

Kosmos was the original successful explorer of the Senegal-Mauritania reserves and agreed to sell BP around 60 percent of the licences in 2016 with the UK major taking over operatorship.

The US company retained around 30 percent of the Senegal fields and licence and about 28 percent of the project’s Mauritania holdings.

Kosmos added that as of May 2019, all major contracts have been awarded for phase one of the project and construction activity has commenced with work on the floating production storage and offloading unit.

The latest contract was awarded in April 2019 to US engineering company KBR for the pre-front-end engineering and design services work for Phases 2 and 3 of the Greater Tortue-Ahmeyim venture.

The first gas from the Kosmos-BP FLNG Train 1 is scheduled for 2021 and the start of the second FLNG Train is set for 2023.

The GTA-1 well is located offshore Senegal and was drilled in 2,500 metres of water, about 10 kilometres from the Guembeul-1A and Tortue-1 wells, to a total depth of 4,884 metres.

Kosmos said that the “Ensco DS-12” rig, working on behalf of operator BP, will now drill the Yakaar-2 appraisal well in Senegal in the coming weeks, before drilling the Orca-1 exploration well in Mauritania late in the third quarter.

The other partners of BP and Kosmos in the cross-border Greater Tortue-Ahmeyim project include the national oil and gas companies of both countries.

BP of the UK and Kosmos Energy of the US have decided to go ahead with their multi-billion dollars of investments in developing floating liquefied natural gas projects offshore West Africa with their state partners Mauritania and Senegal.