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Phase 2 of Greater Tortue Ahmeyim LNG project being reevaluated: official

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Phase 2 of Greater Tortue Ahmeyim LNG project being reevaluated: official

Highlights

First oil of GTA pushed back to late-2023

Phase 2 will double capacity to 5 million mt/year

BirAllah project also being reassessed

  • Author
  • Dania Saadi    Eklavya Gupte
  • Editor
  • Aastha Agnihotri
  • Commodity
  • Energy Transition LNG Natural Gas Oil Petrochemicals

The phase 2 of the floating Greater Tortue Ahmeyim LNG project offshore Mauritania and Senegal is currently being reshaped with a final investment decision expected by late 2022 or early 2023, a senior energy official from Mauritania said Nov. 9.

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Speaking to S&P Global Platts, Moustapha Bechir, the Director General of Hydrocarbons at Ministry of Petroleum, Energy and Mines at Mauritania, said the second phase needed to be better optimized as a lot of capital expenditure was allocated towards phase one.

First gas from the giant Greater Tortue Ahmeyim LNG project is now slated for late-2023 after many delays caused by COVID-19 and cost inflation, he added.

The start-up of phase one of the BP-operated project was initially expected in the first half of 2023, with an initial capacity of 2.5 million mt/year.

Under phase two, production capacity is expected to double to 5 million mt/year.

"We are now reshaping phase two to better fit the concept and to accelerate it and maximize the economics of the project," Bechir said on the sidelines of Africa Oil Week event in Dubai. "We are targeting to have FID of phase by the end of next year or early 2023 but again it is subject to the optimization which is ongoing now and the [development of the] concept etc.," he added.

Supply crunch

This comes amid a severe supply crunch in the gas market which has caused a global energy crisis.

Gas prices in US, Europe and Asia have surged to record-highs in the past month, as demand has outstripped supply.

Projects such as this are expected to be even more critical to the gas markets in the years to come, according to analysts.

BP and its partners took the final investment decision for the first phase of Greater Tortue Ahmeyim in December 2018, with initial plans to build the project out to a total capacity of up to 10 million mt/year.

The project is based on an estimated 15 Tcf of offshore gas that straddles the maritime border of the two West African countries.

BP in February last year said its own gas marketing arm had agreed to buy all the LNG to be produced at Greater Tortue Ahmeyim LNG in its first phase for an initial term of up to 20 years.

First gas had originally been expected in 2022, but delays related to COVID-19 pushed the startup date back into 2023.

The first phase of the project has oil-indexed pricing, while the second could be priced against oil, gas or a combination of both, Kosmos had said previously.

Reassessing BirAllah

Bechir however said the BirAllah development has also observed some delays due to the current change in landscape to fossil fuels projects.

The ministry along with the partners are still evaluating whether the project should focus only on LNG and whether it should also look at developing blue hydrogen or delve into petrochemicals.

In 2019, Oil major BP said it had discovered "world-class" gas reservoirs in the Bir Allah/Orca area in Southern Mauritania and in Yakaar-Teranga in Senegal.

These are very near the Greater Tortue Ahmeyim LNG project but can only be put in place once the flagship development kicks off.

Exploration and drilling activity among oil majors and explorers in Mauritania had growing steadily in the past few years until the COVID-19 pandemic struck.

Mauritania was expected to be a big oil producer following the discovery of the Chinguetti oil field, but this development matured very quickly.

Chinguetti started producing in 2006 with an output rate target of 75,000 b/d, but the field has been beset by technical issues resulting in a rapid production decline and the field stopped producing any crude last year.