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Total signs on for Benin LNG

Total signs on for Benin LNG


Total inked gas supply and host government agreements with the Beninois state and power utility SBEE in July to develop a floating LNG import terminal and supply Benin with 0.5mn t/yr of LNG from 2021. But experience of west African LNG projects suggests that this timescale should not be taken as guaranteed.

The imports will supply plants in Benin, such as a new 127MW power station at Maria Gleta, close to Cotonou, the country's commercial centre, says Dona Jean-Claude Houssou, Benin's energy minister, adding, perhaps optimistically, that the supply will be "on preferential terms".

A consortium led by Total was given the rights to develop a 3bn t/yr import terminal in Cote d'Ivoire as long ago as October 2016, at which point the major was targeting a mid-2018 start-up. Final investment decision (FID) on the project has still not been taken. In a January paper for the Oxford Institute for Energy Studies (OIES), Jonathan Stern said FID was close, but was still dependent on final government approval.

Other countries in the West African Power Pool (WAPP)—where electricity grids are interconnected across national borders and incorporates Mali, Burkina Faso, Niger, Senegal, The Gambia, Guinea-Bissau, Guinea, Sierra Leone, Liberia, Cote d'Ivoire, Ghana, Togo, Benin and Nigeria—also have ambitions to join the LNG importers club.

Ghana is furthest down this road, as its 2mn t/yr Tema LNG project, backed by private equity firm Helios Investment Partners, signed a deal in September last year with two Chinese engineering firms to construct a terminal and floating storage unit. The facility is due to be ready towards the end of the first quarter of 2020.

Russia's Rosneft has a 12-year deal to supply the state-owned Ghana National Petroleum Company (GNPC) through the Tema terminal. After 12 years, ownership of Tema LNG will transfer to the Ghanaian state.

Other WAPP countries have mooted LNG import projects, but they look more speculative. Both Togo and Burkina Faso, which is landlocked but shares borders with all of Cote d'Ivoire, Ghana, Togo and Benin, have met with LNG exporter Equatorial Guinea to discuss potential supplies through the latter's LNG2Africa initiative.

Although BP took FID on the Tortue FLNG project that will put Senegal and its neighbour Mauritania into the LNG exporters' club, the country also continues to examine import options. Last month, Senegal's energy minister Mouhamadou Makhtar Cisse visited Jordan to learn more about the latter country's experience of importing LNG for power generation.

In southern Africa, the World Bank's International Finance Corporation entered into a cost-sharing agreement in late July with South Africa's state-owned logistics firm Transnet to fund a feasibility study into an LNG import terminal at Richards Bay, the centre of the country's coal export industry. The aim is to attract a private investor that would take a majority stake in the project.

Although complementary to other South African initiatives aimed at gas-to-power, Transnet chief business development officer Gert de Beer stresses that the project is more geared towards growing industrial gas usage.

The projected timeframe is for a 2024 completion, although a request for proposals will be prepared only when the investment case is concluded and approved, and Transnet has the required regulatory authority to proceed, cautions Sue Lund, the firm's general manager for growth and diversification.

South Africa's neighbour Namibia has proposed an import facility at Walvis Bay. But the OIES' Stern notes that "there has been little new news on this since 2017".

In east Africa, Kenya mooted an LNG import terminal at Mombassa in 2014, in part to supply the planned 700MW Dongo Kundu power plant, but shelved the project in 2016. The government revisited the initiative in 2018, but there is no evidence of significant progress since.

US multi-agency initiative Export.gov said in March this year that nine bids were being evaluated for a tender issued last year by island nation Mauritius' central electricity board last year to develop a gas-fired power plant on the island, which would also require LNG import facilities to supply it.

Source: petroleum-economist.com

Published: 16-08-2019

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