LNG

Saipem, the Italian subsea and drilling company, has been awarded contracts in the LNG-producing nation of Angola for the Azule Energy joint venture and for wells in the Côte d'Ivoire where the West African nation is aiming to boost oil and gas production.

Italian energy company Eni and Algerian oil and gas company Sonatrach have held talks in Milan to increase their cooperation in exploration and production, LNG and pipeline gas supplies.

Eni Chief Executive Claudio Descalzi and Sonatrach counterpart Toufik Hakkar discussed progress on their joint ventures and signed various new agreements on exploration and production, research and development and decarbonisation.

“These agreements mark a further step forward in strengthening the partnership between the two companies,” said a statement.

The Italian company and Sonatrach hope to improve output with more investment in developed and undeveloped acreage of Eni’s 12,436 square kilometre in Algeria.

The most recent data shows Eni’s oil and gas production was at an average of 90,000 barrels of oil equivalent per day.

Operated activities are located in the Bir Rebaa desert, in the Central-Eastern area of Algeria.

“The first of the agreements signed aims to implement an ambitious program for the relaunch of exploration and development activities in the Berkine Basin and provides for the creation of a gas and crude oil development hub through a synergy with existing installations,” explained Eni.

“This agreement is part of the process for the finalization of a new hydrocarbon contract in the Basin, under the aegis of the new Algerian oil law which came into force in December 2019,” added Eni.

Descalzi and Hakkar also signed an accord for the development of the partnership between Eni and Sonatrach in new technologies with a focus on renewable energy, biofuels and hydrogen.

Eni and Sonatrach additionally signed an agreement that provides for cooperation between the Eni Corporate University and the Institut Algerien du Petrole for the implementation of training programmes for students in the upstream sector, new technologies and the energy transition.

“These agreements represent the commitment made by our companies to strengthen a historic partnership,” they said.

Sonatrach is one of the main suppliers of LNG and pipeline natural gas to Europe and in February 2021 commissioned the Boosting III project for the Hassi R'mel gas hub in Laghouat province of central Algeria, which produces and supplies over half of the nation’s natural gas.

The Hassi R'Mel's Boosting III project came into operation as Sonatrach also announced increased natural gas sales in 2020 to both Spain and Italy, its main European markets.
The giant Hassi R’Mel field had been in long-term decline but the $2-billion project will boost volumes during 2021 and beyond.

The project will increase and stabilize feed-gas supplies to the Mediterranean Coast from the Hassi R'Mel hub to the port of Arzew where one of the nation’s two LNG exports plants are located.

Algerian LNG exports had been falling in previous years, though in the most recent official annual figures had recovered to a combined 12.34 million tonnes from the Arzew plant and the second facility at Skikda.

Developing new fields in Algeria and linking them to the rest of the gas network via the Hassi R'Mel hub has been a strategic priority for Sonatrach over the past few years.

The Booster III project will enable the maintenance of an estimated production level of 180 million cubic metres per day and to recover additional reserves estimated at 400 billion cubic metres of natural gas.

In 2020, Algeria exported to Italy a volume of gas of 14.8 Bcm, an increase of 12 percent compared with 2019.

The Algerian supplier also consolidated its position as Spain's leading gas supplier in 2020 with an exported volume of 9.6 Bcm, part of which flowed through to Portugal.

The volumes also comprised LNG cargoes delivered to the southern European nations as well as on the three pipelines, two to Spain and one to Italy.

Algerian gas supplies are carried from the Hassi R'Mel hub on the Medgaz pipeline via Beni Saf to Almeria in southern Spain and on the Maghreb-Europe Gas Pipeline from the Hassi R'mel field through Morocco to Cordoba in Spain.

The Italian gas also starts from the Hassi R'mel hub and is supplied through the Trans-Mediterranean Pipeline from Algeria via Tunisia to Sicily and then onwards to the mainland of Italy.

Italian energy company Eni and UK major BP announced a new natural gas discovery in the “Great Nooros Area” of the Abu Madi West Development lease in the Nile Delta offshore Egypt and coupled with other finds in the block there is potential for LNG production.

Eni said that there could be more than 4 trillion cubic feet of gas in place in the Great Nooros Area where there have been other discoveries since 2015.

The latest exploration and production success for Eni is making the East Mediterranean Basin a potential world-class gas province with other nations such as Israel and Cyprus also making discoveries in recent years.

The Nile Delta Block operator Eni said the new discovery, achieved through the Nidoco NW-1 exploratory well, is located in 16 metres of water depth and is four kilometres north from the Nooros field discovered in July 2015.

The Nidoco NW-1 exploratory well discovered gas-bearing sands for a total thickness of 100 metres.

“In the Abu Madi formations a new level, which was not yet encountered in the Nooros field, has been crossed proving the high potential of the Great Nooros Area and the further extension of the gas potential to the North of the field,” explained the Italian company.

“The preliminary evaluation of the well results, considering the extension of the reservoir towards north and the dynamic behaviour of the field, together with the recent discoveries performed in the area, indicates that the Great Nooros Area gas in place can be estimated in excess of 4 Tcf,” stated Eni.

Eni said that together with its partner BP and in coordination with the Egyptian petroleum sector, it would begin screening the development options of this new discovery and available synergies with the area's existing infrastructure.

Eni holds a 75 percent stake in the license of Abu Madi West lease, while BP owns the remaining 25 percent stake.

The Italian company’s title of operator is in conjunction with Petrobel, an equal joint venture between Eni and the state company Egyptian General Petroleum Corp. (EGPC).

Eni signed a series of agreements in March 2020 with the government of Egypt and state-owned companies to re-open the nation’s Damietta LNG export plant east of Alexandria.

The plant, a joint venture called Segas, is 40 percent-owned by Eni through Union Fenosa Gas (50 percent Eni and 50 percent Naturgy).

The facility has a nameplate capacity of 5.5 million tonnes per annum of LNG, but has been idle since November 2012 when Egypt suffered natural gas shortages.

In addition to Damietta LNG, Egypt has a second export plant, the Idku facility operated by Royal Dutch Shell and which has been back in commercial operation since 2017.

Eni’s discovery of the huge Zohr gas field in the East Med in 2015 helped transform the Arab nation’s LNG and domestic gas fortunes.  

Italian energy company Eni, a prominent LNG sector participant, took a hit of more than US$3 billion in the first quarter as it wrote down asset values and took one-time charges to cope with the double calamity of the pandemic and the oil price plunge.

Italian energy company Eni, with recent natural gas discoveries in nations such as Mozambique and Egypt, has signed an accord with the Gulf kingdom of Bahrain covering issues like LNG supply and exploration.

BP of the UK and Italian energy company Eni signed a heads of agreement with the Ministry of Oil and Gas of the Sultanate of Oman to work jointly towards a significant new exploration opportunity in the Arabian Peninsula nation where BP’s onshore Khazzan natural gas discovery revitalized LNG production.

BP said that under the accord, the two companies would work with Oman towards the award of a new exploration and production sharing agreement (EPSA) for Block 77 in central Oman.

BP and Eni will now enter discussions with the Ministry to finalise details.

“This would represent a further deepening of BP’s important position in Oman, building on our successful delivery of the major Khazzan project in 2017 and its second phase of development that is currently under construction,” said Bernard Looney, BP chief executive of the upstream division in reference to additional output achieved by Oman LNG from having sufficient domestic gas supplies.

“We look forward to continuing to explore and efficiently develop the country’s resources, working in close partnership with Eni and Oman to underpin our commitment to delivering long-term gas production for Oman,” he added.

The country’s three existing liquefaction Trains at the facilities near the town of Sur have been at full capacity since 2017 after previously suffering from a lack of feed-gas as supplies were diverted to fill domestic gas shortages.

The Omani government allocates Oman LNG supplies from various gas fields and the Khazzan field production has ended all feed-gas concerns for the near future.

The three Omani LNG processing Trains currently produce around 10.4 million tonnes per annum and supply nations such as Japan, South Korea, India and Kuwait.

Block 77, with a total area of almost 3,100 square kilometre, is located in central Oman, 30km east of the BP-operated Block 61, which contains the already-producing Khazzan gas project as well as the Ghazeer project currently under development.

The Khazzan natural gas field began production in 2017, under budget and ahead of schedule. Khazzan now produces around 1 billion cubic feet of gas a day.

The Ghazeer field is expected to add a further 0.5 bcf/d of production and is expected to come on stream in 2021.

BP has had an upstream presence in Oman since 2007 when it signed an exploration and production sharing agreement for Block 61.

Gas sales agreements and approval for the development of the Khazzan project on Block 61 were signed in 2013. In 2016, the EPSA for Block 61 was amended, adding a further 1,000 square kilometres and allowing a second phase of development.

The United Arab Emirates, the LNG producer that is expanding its natural gas and oil exploration in Abu Dhabi, has signed two concession agreements with Italian energy company Eni and its joint venture partner from Thailand, PTT Exploration and Production Company.

The heads of the major energy companies of France, Italy and Algeria have signed two agreements for an exclusive partnership for an exploration campaign offshore the LNG-producing North African nation.