BP sees imminent LNG sales deal from Mauritania/Senegal project: CEO

London — BP expects an imminent sales deal for LNG from its planned Greater Tortue Ahmeyim LNG project offshore Mauritania and Senegal, CEO Bob Dudley said Tuesday.

Speaking after the release of BP's fourth-quarter earnings, Dudley said there was potential for a "large, long-term integrated LNG business" to be formed from the resources in the countries' offshore.

BP and its partners took the final investment decision for the Greater Tortue Ahmeyim floating LNG project in late December 2018.

"The sales and purchase agreement for the LNG should be coming any time now," Dudley said.

The project is designed in its first phase to export 2.5 million mt/year of LNG before expanding to 10 million mt/year in later phases.

It is based on an estimated 15 Tcf of offshore gas and is expected to produce its first gas in 2022.

"Phase one is in execution," Dudley said, with the second and third phases "progressing through optimization."

There is also scope for more developments offshore Mauritania and Senegal following a recent three-well drilling campaign that identified high-quality gas reservoirs of a "world-class scale," BP said late last year.

Bernard Looney, BP upstream chief and CEO from Wednesday, said last year there was potentially some 50-100 Tcf (1.4-2.8 Tcm) of gas in place across the region.

Soft prices

The development of Greater Tortue Ahmeyim LNG comes as the global market remains oversupplied due to the start-up of projects in Australia and the US, and demand growth being affected in particular by the warm winter across Asia and Europe.

BP CFO Brian Gilvary said the company had been "bearish gas" for a while, and expected similar market conditions through 2020 in the US.

"The question is: do you start to recover in 2021 or 2023 given the two effects of gas being backed up in the US and big LNG projects around the world coming on?" he said.

"What you're going to see in the first half, coming out of the mild winter, is that prices are going to remain pretty soft at the levels that we see today," he said.

"We think that will clear out by the time we get to the back-end of this year," he said.

Gilvary said the key to LNG was trading. "It's all about the optionality and making sure that we retain those options with different price points that allows the team to optimize the way they have," he said, adding that 2019 had been a "very successful year" for LNG trading.

Gilvary said BP's LNG portfolio is made up of two thirds equity LNG and one third merchant LNG.

"No significant equity volumes [are set] to come on this year other than the ramp-up of existing LNG that we have," he said.