Alhaji Mele Kyari, the Group Managing Director of Nigerian National Petroleum Corporation (NNPC) disclosed at the 4th Sub-Saharan Africa International Petroleum Exhibition and Conference in Lagos, that the construction of the Ajaokuta-Kaduna-Kano (AKK) gas pipeline would commence in the second quarter of 2020. Alhaji Kyari said the pipeline when fully constructed would help boost economic activities in the country.
NNPC plans to expand its domestic gas footprint with the delivery of the Escravos-Lagos Pipeline System (ELPS) II and the OB3 gas pipeline to connect the East and the West. Alhaji Kyari said the capacity of the ELPS would be doubled from 1.1 billion standard cubic feet of gas to 2.2 billion scf.
He added that with the Final Investment Decision of the NLNG Train 7, Nigeria, Africa’s leading exporter of Liquefied Natural Gas (LNG) and the fourth in the world after Qatar, Australia and Malaysia, was ready to capture more LNG market.
Finance Minister Zainab Ahmed said Nigeria will issue a sovereign guarantee to back the bulk of a gas pipeline that is a core part of the government’s energy strategy. The sovereign guarantee will back 85% of the $2.59 billion pipeline cost, funded in turn by a loan facility from Chinese lender Sinosure.
The loan has an interest rate of Libor plus 3.7% with a 12-year repayment period and a three-year moratorium. NNPC will cover the remaining 15% of the project’s cost. The government plans to develop gas-fired power plants along the pipeline, and to use it to encourage companies to capture and sell gas rather than flaring it, which environmentalists say creates a health hazard and contributes to global warming.
In February, Nigeria launched new regulations aiming to encourage gas development and announced a $1 million grant from the U.S. government to develop a power plant that would be fed by the pipeline.
Bowleven has awarded a contract to Technip FMC to provide Front-End Engineering Design (FEED) work. Technip will be the lead FEED contractor for the Etinde gas condensate field, off the coast of Cameroon. The first phase of the proposed development concept comprises an onshore gas processing, storage and export facility tied to an unmanned wellhead platform with associated gas pipeline infrastructure.
Reservoir engineering and sub-surface development elements of the FEED program will be carried out by field operator New Age. Bowleven said Technip will work alongside the joint venture team to lead onshore and offshore aspects of the FEED program. Earlier in February, New Age signed a letter of intent (LOI) with Victoria Oil & Gas to supply gas from Etinde.
In March 2015, Bowleven sold a 40% stake to NewAge (African Global Energy) in its Etinde permit, in a deal valued at around $250m. The oil and gas exploration firm owns a 37.5% interest in the field. Other partners in the joint venture include LUKOIL (37.5%) and Bowleven (25%).
On Thursday 5th March, crude oil prices struggled to rise despite reports that delegates to The Organization of the Petroleum Exporting Countries (OPEC) policy meeting in Vienna were coalescing around Saudi Arabia’s plan to cut 1.5 million barrels per day (bpd) from global output to mitigate demand lost to the coronavirus crisis.
The U.S. West Texas Intermediate (WTI) crude futures were down 15 cents at $46.63 per barrel, while Brent crude futures fell 19 cents to $50.94. The U.S. Energy Information Administration in its weekly report showed that crude oil inventories increased by 800,000 barrels from the week ending February 28.
Oil futures are down sharply in early 2020, with both U.S. benchmark, WTI and global benchmark Brent tumbling into a bear market in February. Both grades of crude are down around 24% for the year to date. Brent futures settled Thursday at the lowest since July 2017, according to Dow Jones Market Data.
OPEC recommended that its members and allied producers cut production by another 1.5 million barrels, but that unexpectedly large amount may not be enough to stabilize prices as demand continues to drop. As global inventories increase daily, the meeting of OPEC and its allies is unlikely to result in cuts enough to balance the market. Under the proposal, OPEC would cut its production by 1 million bpd, while non-OPEC members, led by Russia, would lower output by 500,000 bpd for a total of 1.5 million barrels per day.
OPEC initially recommended that the additional output cuts run through the second quarter but late Thursday, said it recommends extending the added reduction to the end of this year. OPEC+ is expected to announce the official decision at its meeting on Friday.The spread of COVID-19 and it’s impacts on oil demand growth has been staggering, if not unprecedented, with February’s crude demand dropping by a shocking 4.6 million bpd, led by a 2.9 million bpd month-on-month drop in Chinese crude runs.
Libya’s oil production has declined to around 120,000 bpd — its lowest since 2011 because of a blockade by the Libyan National Army since January on key oil terminals and exports, according to S&P Global Platts. Libya’s output was as high as 1.2 million bpd before the blockade.