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Long-Term Sales Contracts Could Be Key to Senegal’s, Mauritania’s Natural Gas Success (By NJ Ayuk)

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2 years ago

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natural gas

The deal calls for Kosmos to provide 2.45 million tonnes per annum (mtpa) of LNG for an initial term of up to 20 years

JOHANNESBURG, South Africa, July 25, 2022/APO Group/ — 

By NJ Ayuk, Executive Chairman, African Energy Chamber (www.EnergyChamber.org)

In 2020, rich natural gas resources offshore Mauritania and Senegal were the subject of the biggest long-term liquefied natural gas (LNG) contract signed that year.

The agreement between American oil firm Kosmos Energy, its partners, and BP Gas Marketing Limited, was for LNG from Phase 1 of the Greater Tortue Ahmeyim project, offshore Mauritania and Senegal. The deal calls for Kosmos to provide 2.45 million tonnes per annum (mtpa) of LNG for an initial term of up to 20 years. 

The deal was a milestone for the companies and for Senegal and Mauritania.

But frankly, with so many natural gas projects starting up in the two countries, we should be hearing about even more long-term gas sales contracts.

Currently, Kosmos Energy and its partners (BP, Senegal’s state-owned oil company, Petrosen; and Mauritania’s Societe Mauritanienne des Hydrocarbures) have only succeeded in securing sales contracts for Phase 1 volumes of the Greater Tortue Ahmeyim Project. This is despite the fact the project is estimated to have 15 trillion cubic feet of gas production potential, enough for 30 years of production or more.

In another promising BP and Kosmos Energy partnership, the ultra-deepwater Yakaar-Teranga gas field offshore Senegal — holding an estimated 2,739 billion cubic feet of natural gas reserves — only a fraction of Phase 1 volumes have been contracted.

And that’s more than we can say for BP’s BirAllah project in Mauritania, projected to generate 1,642 barrels per day of crude oil and condensate, 277 million cubic feet (Mccfd) per day of natural gas, and 1,304 Mmcfd of liquid natural gas by 2030. As of yet, production from BirAllah remains uncontracted.

I can’t understate the importance of pursuing long-term sales contracts to help set the stage for gas project success. When companies secure decades of LNG purchases, for example, they’re much more likely to line up the investor support they’ll need to produce the natural gas that they’ll eventually be liquifying. Why? Long-term contracts minimize investors’ risks; they know that the revenue that comes in from LNG sales will help cover their investment costs.

Long-term contracts minimize investors’ risks; they know that the revenue that comes in from LNG sales will help cover their investment costs

Natural gas project start-ups are likely to send production levels in Senegal and Mauritania soaring, from practically nothing to 265,000 barrels of oil equivalent per day (boepd) by the end of the 2020s. That momentum is likely to build with production nearly doubling to more than 500,000 boepd by 2035, tripling to 750,000 boepd by 2040, and continuing to rise well into the 2040s.

This represents great promise, both for the oil and gas companies in the region and also for the people of Senegal and Mauritania. The gas these projects generate can create tremendous job and entrepreneurial opportunities. It can meet domestic needs for gas-to-power programs designed to address energy poverty. It can be monetized, and in turn, help fund much-needed infrastructure, from pipelines to ports, with the potential to foster economic growth and diversification. And, it can serve as feedstock for petrochemical and fertilizer plants, which will contribute to industrialization and even more economic growth.

These are all reasons why the African Energy Chamber, in our forthcoming Petroleum Laws – Benchmarking Report for Senegal and Mauritania, urges companies in the region to make securing long-term gas sales contracts a priority. By fostering stable gas project revenues and investor security, long-term agreements will help Senegal and Mauritania fully capitalize on their natural gas resources.

The Time is Right

While Kosmos Energy’s long-term sales agreement with BP Gas Marketing Limited could be called a rarity in 2020 when COVID-19 practically killed demand for oil and gas and forced companies around the globe to put projects on hold, there’s every reason to be optimistic about securing long-term gas sales contracts in 2022. This is particularly true in European markets, which recently made a dramatic shift away from spot transactions (immediate or near-term sales with no guarantee of additional transactions going forward) for LNG.

That transition began within the last year, when Europeans began feeling the impacts of diminishing natural gas supplies, Irina Slav wrote for Oilprice.com.

“A decline in investments in new gas production, long lead times on liquefaction facilities, and growing pressure on emission reduction collided to result in tight gas supply as demand continued to grow globally,” Slav explained. “Europe, the poster child of the energy transition, was horrified to learn it did not have enough wind and solar generation capacity to replace gas consumption — especially amid low wind speeds and during the less sunny seasons.”

Those circumstances sent demand for long-term gas supplies soaring. And then Russia invaded Ukraine.

“The Russian invasion of Ukraine has had a dramatic impact on long-term LNG contracts,” Wood Mackenzie principal analyst Daniel Toleman said in June. “Many traditional LNG buyers will neither procure spot gas or LNG nor renew or sign additional LNG contracts with Russian sellers. Spot prices have also been high and volatile, pushing many buyers towards long-term contracts. Additionally, some buyers are returning to long-term contracting on behalf of governments to protect national energy security.”

All of these factors are converging to create a window of opportunity for securing long-term gas and LNG contracts, and companies in Senegal and Mauritania should be capitalizing upon it.

Government leaders there are doing their part to help: Both Senegal and Mauritania have worked to offer international oil and gas companies favorable economic terms to operate within their borders, meaning companies can pursue projects with lower capital expenditures.

So, my message to oil and gas companies operating in Senegal and Mauritania is, act now to lock in long-term sales agreements for gas and LNG. Europeans could back their words by signing long-term agreements. Our industry need to act now to put ourselves in the optimum position for attracting investments. Do what it takes to achieve a win-win that could be beneficial for you while setting the stage for local communities, businesses, and individuals to realize a more prosperous future.

Distributed by APO Group on behalf of African Energy Chamber.

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African Energy Week (AEW) 2024 to Navigate the Future of Oil & Gas Financing Amid Energy Transition

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14 hours ago

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September 9, 2024

By

Kinetiko Energy

The African Energy Week: Invest in African Energy conference will gather industry leaders to explore oil and gas financing tools and strategies in the age of the energy transition

CAPE TOWN, South Africa, September 9, 2024/APO Group/ — 

As the global energy landscape shifts towards cleaner and more sustainable sources, Africa’s oil and gas sector faces challenges in securing financing for upstream projects. Nearly $3 billion was mobilized toward African energy projects in 2023 – with a significant portion directed towards natural gas – according to the African Development Bank (AfDB). As global markets evolve, African financing strategies must adapt to support both economic growth and long-term sustainability.

The Financing Upstream Oil & Gas in the Age of Transition session at African Energy Week (AEW): Invest in African Energy will explore how African oil and gas projects are securing financing in a rapidly changing landscape. The session will unpack evolving regulatory frameworks, innovative financing models and the balance between traditional fossil fuel and renewable energy investments. Moderated by Laura Sima, Director of S&P Global Commodity Insights, the panel will feature Trafigura Group Head of Upstream Finance Matthieu Milandri; Africa Finance Corporation Vice President Taiwo Okwor; and Project & Export Finance Africa Managing Director & Regional Head Fathima Hussain.

AEW: Invest in African Energy is the platform of choice for project operators, financiers, technology providers and government, and has emerged as the official place to sign deals in African energy. Visit www.AECWeek.com for more information about this exciting event.

To address shifting investment priorities, a dedicated Africa Energy Bank (AEB) has been launched by the African Petroleum Producers Organization and African Export-Import Bank. To be based in Abuja, the AEB aims to bridge Africa’s infrastructure funding gap and accelerate the development of energy projects across the continent. As a supranational institution, the AEB will provide critical funds for emerging oil and gas projects across Africa, supporting the sector amid the global energy transition, and is currently open for signature by prospective member states.

African natural gas projects have been a leading destination for foreign investment, as gas is considered a cleaner alternative and even labeled as “green energy” in the EU. Projects like Senegal and Mauritania’s Greater Tortue Ahmeyim LNG – led by bp and Kosmos Energy – have secured $4.8 billion in investment from a mix of equity from the IOCs and debt financing supported by multilateral banks. Blended finance – combining both public and private sector capital – has emerged as a critical solution to mobilizing large-scale financing in Africa’s energy sector. The TotalEnergies-led Mozambique LNG project represents a total post-FID investment of $20 billion, of which $14.9 billion comes from senior debt financing including a blend of loans from export credit agencies, multilateral finance agencies like the International Finance Corporation and the AfDB, and commercial banks.

Significant capital is also flowing to high-potential hydrocarbon basins with strong exploration prospects. In Namibia, multinationals TotalEnergies and Shell are continuing to explore the deepwater Orange Basin, with TotalEnergies allocating 30% of its one-billion-dollar exploration budget to the country in 2024 alone. Namibia’s government has been active in courting global financiers, emphasizing the need for sustainable energy development alongside oil and gas exploration and production. In Angola, TotalEnergies, Petronas and state-owned Sonangol secured a $6-billion FID for the Kaminho deepwater project in Block 20 that will develop the Cameia and Golfinho ultra-deepwater fields. The project will employ an all-electric FPSO unit, designed to minimize greenhouse gas emissions and eliminate routine flaring. Independent upstream company Invictus Energy also recently secured $10 million from local institutional investors for its Cabora Bassa project in Zimbabwe to develop the country’s first major oil and gas field.

The upcoming finance session will also position public-private partnerships as a mechanism for financing large-scale energy infrastructure projects, as well as de-risking investments. The Republic of Congo has advanced the development of its Banga Kayo block through an amended PSC with China’s Wing Wah Oil Company, enabling the commercialization of the block’s gas resources. In Nigeria, the $2.6-billion Ajaokuta–Kaduna–Kano gas pipeline is being financed through both public and private funds, with the Nigerian National Petroleum Company as the main financier and international lenders including the Industrial and Commercial Bank of China and Bank of China involved. Nigeria’s Federal Government has provided a sovereign guarantee covering 85% of the project’s costs, securing crucial financing and building investor confidence.

Distributed by APO Group on behalf of African Energy Chamber.

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The Islamic Development Bank Institute (IsDBI) Completes Pilot Implementation of Islamic Finance Strategic Mapping Framework in Kazakhstan

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20 hours ago

on

September 9, 2024

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IsDBI

This comprehensive assessment, conducted in collaboration with the Astana International Financial Centre (AIFC), aimed to identify key opportunities and challenges within the country’s Islamic finance sector

ASTANA, Kazakhstan, September 8, 2024/APO Group/ — 

The Islamic Development Bank Institute (IsDBI) (https://ISDBInstitute.org/) is pleased to announce the successful completion of its flagship Islamic Finance Strategic Mapping Framework (IF-MAP, formerly IF-CAF) (https://apo-opa.co/4cXPwti) pilot exercise in the Republic of Kazakhstan. This comprehensive assessment, conducted in collaboration with the Astana International Financial Centre (AIFC), aimed to identify key opportunities and challenges within the country’s Islamic finance sector.

The pilot initiative of IF-MAP was launched (https://apo-opa.co/3MyooGO) in June 2023, and involved extensive consultations with key stakeholders, including government agencies, financial institutions, and industry experts. The resulting tailored policy recommendations report, which outlines the sector’s progress and provides recommendations for future development, has been submitted to the AIFC.

AIFC’s commitment to promoting Islamic finance is evident through favorable conditions offered to Islamic financial companies to operate in both the retail and corporate sectors

As one of the key outcomes of the exercise, IsDBI and AIFC jointly developed the Kazakhstan Islamic Finance Country Report 2024 (https://apo-opa.co/3B4GwFv) which H.E. the Governor of AIFC, H.E. Mr. Renat Bekturov, launched on 6 September during the Astana Finance Days. The report highlights the immense potential of Islamic finance in supporting Kazakhstan’s economic growth and development.

In his welcome address, H.E. Mr. Renat Bekturov noted: “This report not only provides a comprehensive overview of the Islamic finance industry but also highlights our shared vision for the future.  AIFC’s commitment to promoting Islamic finance is evident through favorable conditions offered to Islamic financial companies to operate in both the retail and corporate sectors. The report is an invaluable guide for investors, policymakers, and stakeholders.”

Commenting on the successful completion of the pilot exercise, Dr. Sami Al-Suwailem, Acting Director General of IsDBI, stated, “We are delighted to have collaborated with the AIFC on this important initiative. The Kazakhstan Islamic Finance Country Report offers a valuable analysis of the sector’s current state and future prospects. We believe that the report, together with the IF-MAP policy recommendations submitted to the AIFC, will be instrumental in guiding policymakers, investors, and financial institutions as they work to harness the full potential of Islamic finance in Kazakhstan.”

The IsDB Institute remains committed to supporting the growth and development of the Islamic finance industry worldwide. Through its research, training, and capacity-building programs, the Institute seeks to contribute to the creation of a more inclusive and sustainable financial system.

The Kazakhstan Islamic Finance Country Report 2024 is accessible on IsDBI website here: https://apo-opa.co/4ge7jQ1

Distributed by APO Group on behalf of Islamic Development Bank Institute (IsDBI).

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ST Telemedia Global Data Centres Reinforces Commitment to Digital India, Invests US$3.2 billion to add 550MW Data Centre Capacity

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20 hours ago

on

September 9, 2024

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ST Telemedia Global

SINGAPORE – Media OutReach Newswire – 6 September 2024 – ST Telemedia Global Data Centres (STT GDC), one of the world’s fastest-growing data centre colocation services provider headquartered in Singapore, today announced a significant investment of US$3.2 billion (INR 26,000 crores) to expand its data centre capacity in India by a substantial 550MW, nearly tripling the company’s IT load capacity to meet the demands of India’s thriving digital economy, over the next 5-6 years.

This strategic investment reflects STT GDC’s confidence in India and the growth of its digital economy, as well as aligning with the burgeoning demand for digital infrastructure, driven by the surge in data consumption, cloud computing, digital transformation, and growing adoption of AI applications. This investment also further solidifies our market leadership in India, where we already command about 28% of market share by revenue.

STT GDC India is majority-owned by STT GDC in partnership with Tata Communications Ltd, which holds a minority stake in the company. STT GDC India’s portfolio consists of 28 data centres across 10 cities throughout India. Today, its data centre portfolio has a total combined capacity of over 318MW of IT load, with a well-diversified portfolio of about 1,000 enterprise customers that include many Fortune 500 companies. More recently, STT GDC India was recognised as a Great Place to Work for the fifth consecutive year, as well as one of the Best Places to Work in Asia.

“As we celebrate STT GDC’s 10th anniversary this year, embarking on this ambitious expansion is a sign of our confidence in Digital India and the future of one of STT GDC’s strategic and fastest growing markets globally. Prime Minister Modi’s vision for Digital India has paved the way for opportunity; today the India digital economy’s growth rate of almost three times overall GDP growth is putting the country on pace to achieve a US$1 trillion digital economy by 2027-20281. At STT GDC, we want to play an active role in co-investing and contributing to India’s long-term success by investing in the foundational digital infrastructure that will help further accelerate Digital India. We are excited about the opportunities ahead and are confident in our ability to contribute significantly to India’s digital transformation,” said Bruno Lopez, President and Group Chief Executive Officer, ST Telemedia Global Data Centres.

STT GDC, along with several other Singapore business leaders, participated in a Business Roundtable with Prime Minister Narendra Modi hosted by the Singapore Business Federation on 5 September 2024.

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1India digital economy: India to be $1 trillion digital economy by FY28: IT minister Rajeev Chandrasekhar – The Economic Times (indiatimes.com)

About ST Telemedia Global Data Centres
ST Telemedia Global Data Centres (STT GDC) is one of the fastest-growing data centre providers with a global platform serving as a cornerstone of the digital ecosystem that helps the world to connect. Powering a sustainable digital future, STT GDC operates across Singapore, the UK, Germany, India, Thailand, South Korea, Indonesia, Japan, the Philippines, Malaysia and Vietnam, providing businesses an exceptional foundation that is built for their growth anywhere. For more information, visit https://www.sttelemediagdc.com/.

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