LNG

ARA Petroleum, part of the Zubair Corporation based in the Sultanate of Oman in the Arabian peninsula, has been granted a 25-year development licence for the Ntorya gas discovery area onshore the far south of Tanzania.

The licence was awarded to the operator of the existing Ruvuma joint venture, ARA Petroleum Tanzania Limited (APT), a wholly owned subsidiary of ARA Petroleum.

APT took over operatorship of the onshore Ruvuma JV in 2020 and now owns a 75 percent working interest.

The Ntorya gas field lies within the Tanzanian onshore Ruvuma JV licence area and is adjacent to a region containing the world-class offshore natural gas resources with the same name in the Rovuma Basin underpinning LNG projects in Mozambique waters to the south.

ARA Petroleum is based in Muscat, Oman, and has affiliated offices in London, Dar es Salaam in Tanzania and Trondheim in Norway.

Onshore resources

The award of the development licence allows ARA Petroleum’s APT unit to proceed with Tanzania’s largest onshore gas development with the goal of producing gas for the growing domestic market in the next year.

“We are delighted to receive this licence from the Ministry of Energy and thank all the Tanzanian agencies involved,” said Erhan Saygi, General Manager of APT.

“We are ready to launch work immediately to bring this onshore development project into production,” he stated.

APT explained that it had prepared a field development plan that includes, but is not limited to, converting an existing well into a producing well, building in-field gas processing facilities and contracting a rig operator to drill a third well to appraise the field further.

APT expects to produce 40 million standard cubic feet a day in the first year of production and to increase that to 140 million standard cubic feet a day within a few years, according to a gas sales agreement signed with the Tanzanian Petroleum Development Corporation (TPDC) earlier in 2024.

Such volumes would increase significantly current Tanzanian gas production.

Additionally, APT believes the potential for gas production from the field is far larger having commissioned, acquired and interpretated 338 square kilometres of 3D seismic data over the Ruvuma JV licence area.

Gas potential

Following the interpretation of the seismic data, APT said it considered the area to yield a matured unaudited Contingent Resource estimate of 3.45 trillion cubic feet of Gas Initially In Place (GIIP), with an mean unrisked GIIP potential of 16.4 Tcf and a risked mean potential of 6.9 Tcf for the wider Ruvuma JV area.

“Acknowledging this wider potential, the development licence divides the original ‘Mtwara Exploration Licence’ area into nine blocks: five blocks containing the Ntorya discovery and four blocks labelled as ‘adjoining’ blocks,” the company explained.

The Ruvuma JV parties are required to undertake geological, geophysical and geochemical studies in the area and drill at least one additional exploration well within five years while spending a minimum of $10 million.

“We are excited about further exploration and appraisal work in this area as we consider it to hold truly enormous volumes of gas,” said APT’s Saygi.

“We believe the Ntorya gas field and wider area could be game-changing for Tanzania’s efforts to alleviate energy poverty, spur further economic development and potentially transform the country into a regional energy hub,” he added.

McDermott, the US energy and LNG project engineering company, has outlined part of the scope of the planned Fujairah LNG production facility being developed in the fifth-largest emirate by area of the seven United Arab Emirates.

McDermott was awarded the contract by Abu Dhabi National Oil Co. (Adnoc) to provide front-end engineering and design for the plant.

The Fujairah project will be centred around a liquefaction plant with a total capacity of 9.6 million tonnes per annum.

Fujairah is located outside the Arabian Gulf on the Gulf of Oman. The shores of Fujairah extend for 70 kilometres along the coast from the city of Fujairah.

The emirate shares its boundaries with the emirates of Sharjah and Ras Al Khaimah to the west and the south respectively.

In the north, Fujairah shares its international border with the Sultanate of Oman, an established LNG producer supplying customers in Asia.

Electric drives

“The plant will be designed with electric drives for the liquefaction compressors and will incorporate several features that significantly reduce greenhouse-gas emissions, capitalizing on the experience McDermott,” said the Houston, Texas-based company.

McDermott said the Fujairah plant would benefit from the “robust capabilities and experience” of the US company in FEED performance.

Our biggest differentiator is our ability to execute this FEED on a fast-track basis incorporating all of the characteristics required to support the award of EPC contracts which are expected in 2023,” said Tareq Kawash, Senior Vice President for Onshore at McDermott.

McDermott was involved in initial phases of Adnoc’s LNG development in the late 1980s that resulted in the Das Island plant in Abu Dhabi, the second-largest emirate after Dubai.

The US company constructed the storage facilities for both LNG and liquified petroleum gas (LPG) on an EPC basis on Das Island.

“We are proud to continue our long history with Adnoc by playing an important role in helping to define the next phase of LNG development in the UAE,” added Kawash.

McDermott noted that it was one of the most experienced engineering and construction firms serving the LNG market and has delivered more than 30 LNG Pre-FEED and FEED projects over the past 10 years.

The Fujairah LNG facilities FEED will be performed by teams in McDermott's offices in London and the UAE.

Elecnor, a Spanish infrastructure and energy group, has been awarded a contract to build a natural gas pipeline in Oman as the Sultanate in the Arabian Peninsula expands its domestic gas market as well as LNG exports and bunkering.

South Korea is planning the use of hydrogen in blast furnaces for steel-making rather than in natural gas pipelines as European and US environmental energy lobbyists are putting forward as a gas replacement.

South Korea, the world’s third-largest liquefied natural gas importer, is still feeling the impact of increasing LNG prices and will continue a freeze on power prices into 2022.

Oman, the Arabian Peninsula country and oil producer and long-standing LNG exporter, has been hit by a cyclone, causing major disruption with power cuts and flooding.

The Oil Ministry issued a statement saying that loadings and operations may be temporarily affected as “Cyclone Shaheen” moved along the Sea of Oman.

However, the Ministry said oil fields are far from the path of the cyclone and that there was unlikely to be interruptions to the production of oil nor of feed gas for LNG.

The main Omani LNG export facilities are at the port of Sur on the Gulf of Oman. The plant comprises the three amalgamated liquefaction Trains of two former separate companies, Oman LNG and Qalhat LNG.

Oman exports around 11 million tonnes per annum and its customers include South Korea with around 3.9MT of annual supplies, Japan with about 3MT as well as other leading importers like China and India.

Oman's National Multi Hazard Early Warning System said “Cyclone Shaheen” was accompanied by wind speeds of up to 116 kilometres per hour (72 mph) when it hit the country on October 3, with the cyclone causing heavy rainfall and high waves.

According to the authorities the areas affected by “Cyclone Shaheen” were in the wilayats of Musannah in South Al Batinah Governorate and Saham in North Al Batinah Governorate.

Rescues

There were no clear details of casualties, though dozens of people have been rescued by the Civil Defence and Ambulance Department (CDAA) in different areas.

Oman Air rescheduled 10 flights to an earlier departure time before the cyclone hit.

New gas fields have boosted feed-gas availability for LNG exports in the last few years from the onshore Block 61 comprising the ‎Khazzan field, which began production in 2017, and the Ghazeer field, onstream since October 2020.

Block 61 covers around 3,950 square kilometres in central Oman, and contains the largest tight-gas ‎development in the Middle East.

Gas from the Block is also sent for domestic consumption ‎into Oman’s national gas grid.

Oman is also making progress with developing the Sohar Port and Freezone that is also the future site of an LNG bunkering project on the Arabian Sea coast and near the entry to the Gulf by the Strait of Hormuz.

Oman’s Sohar Port is one of the fastest-growing in the world because of its strategic location.

South Korea, the world’s third-largest liquefied natural gas importer, is expected to see domestic demand for natural gas increase by 15 percent through the next 12 years led by gas-fired power and industrial needs.

UK major BP has sold a 20 percent stake for $2.6 ‎billion to Thailand’s national energy company in key tight natural gas fields onshore the Sultanate of Oman that enabled the Arabian Peninsula nation to stabilize then boost LNG exports over the past three years.

The World Bank said the six members of the Gulf Cooperation Council, including LNG exporters Qatar, Oman and the United Arab Emirates are bouncing back to positive growth from the double blow of Covid-19 and the energy slump, showing the economic resilience of oil and gas.

Japanese liquefied natural gas imports dropped for the sixth months out of the past seven as the nation received fewer shipments from the Middle East and Asia leading to a drop in its energy spending bill on fuels such as LNG and coal.

Shipments of LNG to Japan fell 13.1 percent in May to 5.56 million tonnes compared with 6.40MT in May 2018, according to preliminary figures from the Ministry of Finance.

Imports of the fuel had edged 0.3 percent higher in April to 5.62MT from 5.60Mt in April 2018 after dropping for the previous five straight months.

Imports of thermal coal, a competitor to LNG, also declined by 9.40 percent in May to 7.95MT.

Seven of Japan's nuclear power plants, which numbered 54 on line before the Fukushima disaster in 2011, were operating in May versus nine in the previous month.

The April 2019 rise in LNG deliveries to Japan had been the first since October 2018 when 6.53MT was received, a 6.5 rise on the previous October.

Even during the peak winter months from November 2018 through February 2019, imports dropped as the Japanese followed fuel-saving measures and the government encouraged a drop in costly LNG imports, with coal-fired power often filling the gap.

The cost of the May 2019 cargoes came to 302.17 billion yen ($2.79Bln), a decrease of 13.7 percent from the 350.33Bln yen ($3.23Bln) the cargoes cost in the same month a year ago.

For balance of payments purposes, Japan has been trying for several years to bring LNG import costs under control.

The Ministry’s data for May showed a plunge in imports from the Middle East region for a second successive month to their lowest level since around 2005.

The May 2019 shipments from countries like Qatar, the United Arab Emirates and Oman totaled 793,000 tonnes, down 44.8 percent on May 2018 and less than the 945,000 tonnes received in April 2019.

Analysts said the fall suggests continued plant maintenance work in the region at a time when there was also an outage of the Qatar-UAE Dolphin Energy natural gas pipeline.

The last time monthly shipments from the Middle East dropped under the 1MT level was in 2005 when they regularly totaled between 950,000 to 970,000 tonnes in the second quarter of the year.

Asian LNG shipments cargo deliveries also edged lower by 3.2 percent to 1.37MT from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei.

US volumes received also dropped to 130,000 tonnes versus 138,000 tonnes in April 2019, the equivalent of two large cargoes, while one delivery was received in the same month a year ago.

Monthly Russian shipments from the Sakhalin Island plant in the Far East amounted to 534,000 tonnes, a rise of 12.2 percent versus the same month in 2018.

The balance of imports from Australia, African nations and the spot market amounted to 2.73MT, higher than the 2.66MT imported in April 2019.

Japanese LNG imports had declined by 0.9 percent in 2018. The 2018 imports amounted to 82.85MT versus 83.63MT received in 2017.

Japan’s 2018 import bill was 20.8 percent higher than in 2017 at 4,730Bln yen ($43.14Bln). The Japanese had paid 19.3 percent more in 2017 compared with the previous year with an LNG bill of 3,915Bln yen ($35.58Bln).