MENA Nations
Qatar stands out as by far the most dominant LNG producer in the Mena region and, indeed, globally. All 14 of its proposed liquefaction trains are either operational or under construction. If all goes to plan, this will give Qatar a liquefaction capacity of 77m t/y by 2010, around a third of global LNG production capacity in that year. Beyond 2010, Qatar's capacity flattens off, because no new trains are planned. This is a consequence of a moratorium imposed last year on further projects utilising gas from the North Field. According to energy minister Abdullah al-Attiyah, the moratorium is likely to be reviewed in the second half of 2007. However, even then, the Qataris may feel that they have sufficient LNG capacity, given the nation's stated desire to preserve gas reserves for future generations.
As for projects already under way, Qatar's record of bringing LNG plants on stream successfully has so far been exemplary, but there is significant technology risk associated with the six 7.8m t/y mega-trains it plans to bring on stream between 2007 and 2010 (PE 5/60 p15).
The contrast between Iran and Qatar is striking. Both nations have about the same proved reserves of gas, yet Iran is years away from its first LNG exports. Despite its stated desire to become a major exporter of gas, by pipeline and LNG, the nation is a net importer of natural gas.
Earlier this year, Reza Kasaei Zadeh, vice-oil minister and general director of National Iranian Gas Company (NIGC), said that his country's gas policy was "to achieve eight to 10% of the world's gas trade and its by-products within 20 years. It is estimated that by the end of 2010-2015, Iran's gas exports could reach 248.4bn cubic metres a year, both as LNG and through pipelines."
However, of four LNG projects that have been proposed, one has effectively been cancelled and even the most advanced – Pars LNG, a joint venture between National Iranian Oil Company, Total and Malaysia's Petronas – has yet to start construction.
There are several reasons for Iran's slow progress. Fraught international relations, particularly with the US, is the most obvious. Other obstacles include unpopular buy-back contracts and bureaucratic inefficiency. But perhaps the most important factor is that Iran is a large oil producer – the second-largest in OPEC, after Saudi Arabia. Its substantial gas production is used mostly at home, either to free up oil for exports or to enhance oil recovery through re-injection. There is a heated internal debate between those who favour development of gas exports and those who do not.
Among the other six Mena nations with LNG ambitions, in the Middle East, Abu Dhabi, Oman and Yemen have LNG projects, either operational or under construction, but will need to find more gas if they are to expand this capacity. This leaves Algeria, Egypt and Libya, the three nations of North Africa with sufficient gas reserves for LNG exports.
Algeria has substantial LNG capacity, but all decades old. Two 4.5m t/y projects are being developed, one to replace capacity lost in the Skikda accident of 2004 and another as part of the integrated Gassi Touil project, a second train has been proposed for Gassi Touil, which, if it goes ahead, will take total capacity to 33.5m t/y by 2015.
No other LNG projects have yet been proposed, but Algeria is a major gas province with considerable potential for further growth. The long-term challenge will be to bring new capacity on stream faster than old capacity is retired.
Egypt, a relative newcomer to LNG production, has three trains operating at two LNG complexes, Damietta and Idku, and two new trains have been proposed, one at each complex. If both go ahead, the country's LNG capacity will exceed 20m t/y by 2015. Further LNG development will require further gas discoveries.
Libya is one of the most interesting LNG prospects within Mena. Successful exploration bid rounds in 2004 and 2005, following the nation's rehabilitation into the international community, are likely to be followed by a third before the end of this year. The results of subsequent exploration efforts will begin to emerge over the coming two or three years, and optimism is running high.
For now, however, the only firm prospects are the renovation and upgrading of the existing Marsa el Brega facility by Shell, which has also said it hopes to build a new plant if it finds enough gas in the Sirte Basin.
Mena LNG will indeed play a pivotal role in both helping to meet growing global gas demand and acting as a globalising force between what are now regional gas markets. But the uncertainties and challenges should not be underestimated. As Slick Willie found to his cost, the banks may be "where the money is" – but getting it out can be tricky.
For now, however, the only firm prospects are the renovation and upgrading of the existing Marsa el Brega facility by Shell, which has also said it hopes to build a new plant if it finds enough gas in the Sirte Basin.
Mena LNG will indeed play a pivotal role in both helping to meet growing global gas demand and acting as a globalising force between what are now regional gas markets. But the uncertainties and challenges should not be underestimated. As Slick Willie found to his cost, the banks may be "where the money is" – but getting it out can be tricky.
Via| Petroleum Economist
The Libyan state National Oil Co. will auction off the licenses for the right to develop 12 gas deposits, divided into 41 blocks with a total area of 72,500 sq. km. Thirty-five companies have been admitted to the auction, including Gazprom, LUKOIL and NOVATEK. Libya has the second largest gas deposits in Africa, with 1.47 trillion cu. m.
ExxonMobil, Chevron, BP, Naftogaz Ukrainy, Gaz de France, Total, Statoil, Sonatrach, Conoco, Shell, Eni, Repsol, Petrobras, Petrocanada, ONGC, Wintershall, BG, OMV and PGNiG are among the Russian companies' competitors. Another 21 companies will be admitted to the auction as investors.
Libya has already held three auctions for licenses to develop oil deposits since the United States lifted its embargo against it in 2004. After the auction for the gas licenses, Libya will be able to build a second liquefied natural gas plant. One of the main conditions of the auction is that the Libya receive a share in the projects. The country now produces 12 billion cu. m. of gas per year, 8 billion cu. m. of which is piped to Italy and 1 billion cu. m. of which is liquefied and delivered to Spain. The remainder is used within the country.
Gazprom confirmed its plans to participate in the auction, but declined to elaborate. It already has a presence in Libya after exchanging a share in the South Russian deposit for oil assets in Libya with the German BASF. LUKOIL press secretary Grigory Volchek said that the company is “very interested” in Libyan projects. LUKOIL opened an office in Tripoli two years ago that has been preparing for the auction the whole time. NOVATEK press secretary Mikhail Lozovoi said it was “too early” to comment in that company's plans.
Via|Kommersant
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