LNG

The Republic of the Congo in West Africa has become an LNG exporter under a project developed by Italian major Eni and the first shipment is heading for the Italian floating LNG import terminal at Piombino in Tuscany.

The President of the Republic of the Congo, Denis Sassou-N'Guesso, and the Chairman of Eni Giuseppe Zafarana and Chief Executive Claudio Descalzi celebrated the start-up at an event held the Congolese port of Pointe Noire.

“With the first cargo, the Republic of the Congo enters the group of LNG exporting countries, opening up opportunities for economic growth while contributing to the global energy balance,” said a joint statement.

The loading of the first cargo offshore the Congo makes the nation the third FLNG producer after Cameroon, located further North, and Mozambique in southeast Africa.

FLNG configuration

The “Tango FLNG” facility has a liquefaction capacity of about 1 billion cubic metres per annum and is moored alongside the “Excalibur” floating storage unit (FSU) to use a production and loading configuration called “split mooring” and implemented for the first time in an FLNG project.

Natural gas had been introduced into the system in December 2023, which was a record 12 months after the final investment decision on the project was taken in December 2022.

“The Congo LNG project encompasses the adoption of new technologies and a strong synergy with existing producing assets,” Eni explained.

Following completion of the commissioning phase, the “Tango FLNG” barge succeeded in producing the first cargo on schedule in the first quarter of 2024.

The FLNG hub is located within the Marine XII natural gas field permit area with plateau gas liquefaction capacity of around 4.5 billion cubic metres per annum.

The volumes will be marketed by Eni, strengthening and expanding the company’s LNG portfolio. 

Eni is the only international energy company active in the development of the nation’s natural gas resources, supplying pipeline gas from offshore to the Centrale Électrique du Congo, which provides 70 percent of the country's power generation capacity.

Second plant

Eni has said that a second FLNG vessel with a capacity of about 3.5 Bcm of gas was under construction and would be deployed in 2025.

The Congo FLNG project is the third venture operating in Africa after Cameroon FLNG, Mozambique FLNG and with other ventures being developed in several other nations including Nigeria.

Two more FLNG facilities are additionally being developed in joint projects for Senegal and Mauritania in West Africa and involving UK major BP and Dallas, Texas-based Kosmos Energy.

The first Senegal-Mauritania LNG shipment is scheduled to be produced by the end of 2024.

The “Tango FLNG” hull first operated in Argentina and underwent some conversion in Singapore before being sent to Africa.

The previous owner of the “Tango FLNG”, the Belgian shipping company Exmar, sold the production barge in 2022 to Eni as part of a deal valued at around $646 million

Italian major Eni said it had begun to introduce feed gas into the “Tango FLNG” floating production plant ahead of the shipping of the first cargo in a project located offshore the Republic of Congo in West Africa.

Exmar, the Belgian fleet owner with LNG assets such as the “Tango FLNG” production hull operating at Bahia Blanca in Argentina, said it had repaid a senior unsecured bond as it reorganised some of its finances and cut costs to underpin its financial future.

Exmar said in an update on its finances that it had repaid the unsecured bond funded partially with a new unsecured two-year bond of 650 million Norwegian crowns ($75 million) and partly with available resources.

The company, led by Chief Executive Nicolas Saverys, currently manages a fleet of 10 LNG carriers and FSRUs and owns two FLNG barges. The company, like many others, has suffered over the last few years from the shipping industry downturn.

Exmar also operates in the liquefied petroleum gas market, where it owns or operates around 30 vessels. It has been expanding in the LPG sector while consolidating its LNG interests.

Antwerp-based Exmar said in the financial update that it organized the payments on the Floating Storage and Regasification Unit (FSRU) barge in the second quarter of 2019.

The financing is approved by the credit committee of China State Shipbuilding Corporation (CSSC), where the vessel was built, but due to a delay in the finance documentation with CSSC, the financing is not yet concluded.

“The completion of the documentation is expected in the course of the third quarter of 2019,” said Exmar.

The company also explained that further to the successful performance acceptance tests of the “Tango FLNG” in June 2019, Exmar met all conditions for the partial release of the debt service reserve amounts for the repayment of the $200M loan with Bank of China and Deutsche Bank ($40M in a first phase).

“This repayment is subject to the approval of Sinosure (export credit insurer), the latter taking more time than previously communicated,” it explained.

“Exmar will do its utmost to expedite this repayment, expected to occur in the course of the third quarter of 2019,” stated the Belgian company.

The “Tango FLNG” plant is chartered by Argentina energy company YPF under a 10-year agreement. The vessel was built at the Chinese Wison shipyard in Nantong and delivered to Exmar in 2017.

The vessel is the former floating liquefaction unit, “Caribbean FLNG”, constructed for a cancelled venture in the South American state of Colombia and renamed before being sent to Argentina.

Pending the settlement of both the Chinese credit issues, Exmar said it acquired a bridging loan for $30M to temporarily increase its liquidity.

Additionally, Exmar has signed an agreement with Compagnie Maritime Belge (CMB) for the sale of 50 percent of its shares in Reslea, owner of the office buildings in Antwerp.

Exmar will realize a capital gain of about $19M and therefore reinforce its liquidity position.

The company also gave the instruction to pay the first instalment for the construction of two Very Large Gas Carriers (VLGCs) in accordance with the shipbuilding contract with Jiangnan Shipyard in China.

“Both vessels are under construction in Shanghai and will serve under a firm contract of five years with Equinor after delivery in 2021,” said Exmar.

“Exmar expects and believes that as per December 2019 it is foreseen that all (financial) covenants will be met,” it added.

Exmar posted an annual pre-tax loss of $14.2 million compared with a profit of $29.3M the previous year, though said it was confident of a sound financial future.

Argentine oil and gas producer, Yacimientos Petroleiferos Fiscales (YPF), has sold overseas bonds for the first time in more than a year amid a slow return of investor confidence as the company starts small-scale LNG exports and the nation’s huge Vaca Muerta shale basin continues to be developed.

YPF issued $500 million of 10-year, dollar-denominated notes to yield 8.75 percent. The sale on June 24 was managed by the US Citigroup, the UK’s HSBC Holdings and Itau Unibanco Holdings SA of Brazil.

Bankers said that proceeds from the sale would go towards working capital and refinancing existing debt.

State-owned YPF is traditionally among the country’s biggest corporate borrowers and it hadn’t issued bonds recently in international markets as an economic slowdown and a currency crisis affected investor confidence.

YPF is the largest investor in the Vaca Muerta shale basin of onshore oil and gas reserves in the northwest Argentine province of Neuquen.

Covering an area the size of a small European country, it has become one of the world’s leading shale basins and has attracted international companies such as US majors ExxonMobil and Chevron Corp., Qatar Petroleum, French major Total and Equinor of Norway.

Argentina also loaded its first shipment of LNG on June 3 for export at the “Tango FLNG” facility deployed at the Argentine port of Bahia Blanca.

YPF said the shipment included 30,000 cubic metres of natural gas from the Vaca Muerta shale.

An LNG carrier, the Malta-registered and Japanese-built “Fuji LNG”, lifted the cargo at Bahia Blanca after arriving on June 2 and then proceeded to Cheniere Energy’s Sabine Pass plant in Louisiana, arriving on June 24, according to shipping data.

The “Tango FLNG” plant is chartered under a 10-year agreement from Belgian shipping company Exmar.

The vessel is the former floating liquefaction unit, “Caribbean FLNG”, constructed for a cancelled venture in the South American state of Colombia and renamed before being sent to Argentina.

YPF did not at first specify the destination of the shipment, though said it was being helped by the marketing arm of US exporter Cheniere.

Argentina’s medium-term aim in the LNG sector is to halt its own LNG imports, which will number at least nine large-scale cargoes or more for the Southern Hemisphere winter, and to become an exporter.

Growing natural gas production from the Vaca Muerta shale will eventually meet all of the nation’s energy requirements and leave a surplus for export.

However, production costs for shale will have to be reduced to make exports economic and huge investment is needed in infrastructure to handle large-scale gas volumes and onshore liquefaction, though the floating LNG project is viewed as a good introduction to the export market for YPF.

The “Tango FLNG” plant will produce up to eight cargoes per annum from the Vaca Muerta supplies.

The shale-gas production has also enabled the resumption of pipeline supplies to neighbouring Chile.

Exmar, the Belgian shipping line and owner of the “Tango FLNG” hull chartered to Argentina, said the production vessel has now been fully commissioned after the loading of the first cargo.

“The performance acceptance tests have been successful, the first cargo has been offloaded and will be exported out of Argentina,” said Exmar.

“With this first shipment the start-up of the Tango FLNG is accomplished in a record time following the contract signing in November 2018 and delivery acceptance of the unit in Bahia Blanca in February 2019,” explained Exmar.

Antwerp-based Exmar said the First Argentine shipment has been possible thanks to the excellent cooperation between the teams of Argentine energy company YPF and Exmar.

Exmar stated that the first YPF LNG cargo amounted to around 25,000 cubic metres of gas from Vaca Muerta shale gas reserves in northwest Argentina and marked the entry of Argentina to the club of global LNG exporting nations.

“For Exmar, the successful performance test in Bahia Blanca confirms the technical capabilities of the ‘Tango FLNG’, the first such vessel operating in the Americas,” said Nicolas Saverys, Exmar’s Chief Executive.

“The unit is generating earnings since early May and is expected to be fully on stream after the Argentine winter season,” added the CEO.

“Exmar’s Board of Directors and Executive Committee wish to thank all employees and stakeholders in this project for the great dedication and impressive execution work over the past months,” said the Belgian company.

The “Tango FLNG” plant is chartered under a 10-year agreement from Belgian shipping company Exmar.

The vessel is the former floating liquefaction unit, “Caribbean FLNG”, constructed for a cancelled venture in the South American state of Colombia and renamed before being sent to Argentina.

YPF did not specify the destination of the first shipment, though said the sales operation was helped by the marketing arm of US LNG exporter Cheniere Energy.

Growing natural gas production from the Vaca Muerta shale play in northwest Argentina will eventually meet all of the nation’s energy requirements and leave a surplus for export.