LNG

While South Africa is undergoing an energy and power crisis a liquefied natural gas and helium project in the Free State is expected to progress at a faster pace after receiving loan approvals of $750 million, including from the US International Development Finance Corporation.

South African President Cyril Ramaphosa has declared a national “state of disaster” over his country's power shortages and said the lack of energy security posed an existential threat to the economy and the social fabric of the country.

March 15 (LNGJ) - Renergen, the South African developer of the Virginia Gas Project in the Free State with helium and LNG production planned, said on March 14 it had lined up Ivanhoe Mines, a Canadian-listed owner of South African mining interests, as a potential strategic partner after it acquired a 4.35 percent stake in Renergen.

   “Ivanhoe is an ideal partner to stand alongside Renergen in the development of its world-class helium reserves at Virginia,” said David King, Chairman of Renergen, which is listed on the Johannesburg and Australian securities exchanges. Ivanhoe’s Platreef project is in South Africa’s northern Limpopo province and is targeting palladium, platinum, rhodium, nickel, copper and gold. The Ivanhoe Co-Chairs are Robert Friedland and Yufeng “Miles” Sun.

South Africa’s state-owned Central Energy Fund has issued a request for information to assess the potential for establishing the country’s first LNG import and distribution terminal at the Ngqura deepwater port in the Eastern Cape.

The CEF, which is overseen by the Department of Mineral Resources and Energy (DMRE) is mandated to contribute to the security of the energy supply of South Africa.

The closing date for companies to respond to the request has been set at December 3, 2021.

The port of Ngqura, located 20 kilometres northeast of Port Elizabeth, will be the initial import hub for an LNG import programme.

The documents say that a floating storage and regasification unit (FSRU) is the preferred terminal configuration for the facility.

The FSRU’s proposed preliminary functional requirements include 170,000 cubic metres capacity of LNG storage and more than 4 million tonnes per annum of regasification capacity.

The preferred FSRU ownership model is to lease or charter a vessel for a 20-year period, along with an operator.

Possible EPC

Responses to the South African request could also lead to the possible appointment of an engineering, procurement and construction (EPC) contractor to develop the natural gas infrastructure.

The DMRE also plans to issue a request-for-proposal towards the end of February 2022 for independent power producers (IPPs) to contribute 3 gigawatts of gas-generated electricity.

The CEF is partnered by state-owned logistics company Transnet and the Coega Development Corp. (CDC).

State-owned Transnet, operates gas pipelines, railway lines and ports in South Africa.

Transnet has also been examining possible other projects over the past two years, including at the Port of Richards Bay in KwaZulu-Natal, about 160km north of Durban.

Transnet has said that the Richards Bay Natural Gas Network project could complement the delivery of LNG to new markets in the Eastern Cape and Western Cape provinces through the ports of Ngqura and Saldanha Bay respectively and would support the government’s future gas-to-power projects.

TotalEnergies, the French developer of the onshore Mozambique LNG export project, said the security situation in the southeast African country was improving, opening the way for the future re-start of the venture.

The security situation has been helped by the deployment of peace-keeping forces from Rwanda and other security personnel to tackle Islamic insurgents.

The chief executives of TotalEnergies and the other LNG project lead-developer in Mozambique, Eni of Italy, had recently visited the east African state of Rwanda and thanked the government for its Mozambican peace-keeping efforts.

TotalEnergies declared “force majeure” on the venture in April 2021 over the growing conflict in Mozambique's northern Cabo Delgado province.

The French major had already reduced the workforce to a bare minimum at the liquefaction plant site on the Afungi Peninsula, near the port of Pemba.

This followed a flare up at the end of March 2021 in the fighting in the region linked to an Islamist insurgency near the border with Tanzania.

“We are looking at the situation and, the steps taken by the Mozambican government are going in the right direction,” said Henri-Max Ndong Nzue, the TotalEnergies Senior Vice President for Africa.

Improvements

“Things are improving by what we can see on the ground. The African forces are doing quite a good job,” he added.

The instability has already pushed back the start of first production to at least 2025 from 2024, with full output of just over 13 million tonnes per annum expected in 2026.

TotalEnergies has continually expressed its “solidarity” with the government and people of Mozambique in being able to end the violence and restore security and stability in Cabo Delgado province in the longer term.

The Total-led project includes the development of the Golfinho and Atum gas fields located within offshore Area 1 of Mozambique’s Rovuma Basin.

The liquefaction plant site had already been cleared for construction when Total acquired it from Occidental Petroleum in an almost $4 billion deal in November 2019 for a 26.5 percent operated interest previously held by Anadarko Petroleum.

Total had initially planned to build two liquefaction Trains, each with capacity of 6.45 million tonnes power annum, and with the possibility of up to two additional Trains and overall output of 25 MTPA.

The Rovuma Basin Area 1 licence has estimated resources of more than 60 trillion cubic feet of gas resources of which 36 Tcf could be developed for a four-Train plant.

The Area 1 shareholders in addition to Total include Mozambican state-owned energy company ENH with 15 percent and five other companies

They are Japan’s Mitsui & Co. with a 20 percent stake, three Indian companies, ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each holding 10 percent and Thailand’s PTTEP with 8.5 percent.

Oct 28 (LNGJ) - Saipem, the Milan-listed energy and LNG engineering company whose projects include Arctic LNG II, Nigeria’s LNG expansion and the Virginia Gas venture in South Africa, has entered into a global project cooperation agreement with TechnipFMC, the US-based subsea company.

   The commercial agreement will pursue specific subsea umbilicals, risers and flowlines (SURF) projects where the combination can improve economics and de-risk the overall project development. “The agreement will provide a pool of complementary enabling vessels and facilities and a consolidated reel-laying and J-laying technology base,” said Stefano Porcari, Chief Operating Officer of Saipem’s Offshore Division.

Renergen, the emerging South African natural gas and helium company with liquefied natural gas and liquefied helium production plans as part of the Virginia Gas project in the Free State, has announced very positive laboratory results on commercial helium concentrations, boosting its share price.

Royal Vopak, the Dutch global energy storage company, has joined with US major ExxonMobil, a leading LNG exporter, to study the liquefied natural gas import possibilities for South Africa to become an LNG importer to boost gas-fired power and clean energy availability.

Vopak and ExxonMobil have signed a memorandum of understanding on studying the development of a South African regasification facility.

So far no third-parties are involved in the process to make South African an LNG importing nation in the next couple of years.

“The two companies will evaluate what infrastructure South Africa needs to access LNG. A shift to this resource would allow the country to take advantage of a reliable cost-effective fuel source, while also reducing emissions,” said a joint statement.

Kees van Seventer, President of Vopak LNG, said teaming up with ExxonMobil would allow the development of resilient and efficient LNG infrastructure for South Africa.

“With our presence of nearly 25 years in South Africa, we are committed to enhance Vopak's terminal network in the country with sustainable infrastructure solutions,” added Seventer.

Vopak is an experienced LNG terminal operator and has a 50 percent stake in the Dutch Gate LNG facility in Rotterdam with 540,000 cubic metres capacity of storage.

It additionally has a 60 percent shareholding in the Mexican LNG terminal at Altamira in the Gulf of Mexico with 300,000 of tank capacity.

ExxonMobil is a global partner of Qatar Petroleum and has volumes of LNG for export in the three leading supply nations, Australia, Qatar and the United States.

“ExxonMobil is excited to work with Vopak to evaluate innovative approaches to bring competitive LNG projects to South Africa,” said ExxonMobil LNG Market Development President Irtiza Sayyed.

Affiliates of ExxonMobil and Vopak signed the accord to work together on a feasibility study to assess the commercial, technical and regulatory aspects of an LNG terminal in South Africa.

ExxonMobil and Vopak plan to evaluate the infrastructure critical for South Africa’s needs and to take advantage of the benefits that LNG can bring to the country, including providing a reliable, cost-effective fuel source, as well as an option for reducing emissions.

“These benefits can be achieved by repurposing older coal power plants, converting peaking power plants and securing supply for South Africa’s industrial sector,” they added.

Qatar said it was working towards expanding energy cooperation with South Africa including the possible supply of LNG volumes in the future and help with natural gas infrastructure development.

South Africa plans to launch a tender in 2020 for its first LNG import terminal north of Durban at Richards Bay in a project partly-funded by a unit of the World Bank that usually helps under-developed nations lIke Bangladesh rather than commodities-rich countries.