Kosmos is Clear About LNG Competition
Kosmos CEO Andrew Inglis told analysts on May 9 that if any gas monetization scheme goes ahead, based on its Mauritania/Senegal Tortue gas resources, then it will have to be competitive against the currently lowest-priced LNG, namely from the US Gulf Coast
This week Kosmos revised its estimate of its P-mean gross resource base for the Greater Tortue Complex to 25 trillion ft3, from the previous 20 trillion ft3, based on a new gas find at its Teranga-1 well.
Tortue gas is lean gas and could be piped to shore 130km away at low cost and with minimal gas processing, he said. The upstream cost of producing the gas would be under $2 per thousand ft3, and any LNG produced had to be compete at a sales price of less than $5/’000 ft3 ($4.90/mn Btu).
Asked on a call to analysts what might attract investors to an LNG development, Inglis listed the size of the reservoir, that it was lean gas, and that it is not in deepwater. He expected that it could be developed in production modules of 2mn tons/yr.
“Beyond 2020, we believe there’s potential for that gas to seek a good buyer. There’s churn in [gas] contracts in Europe. Ultimately it’s about the pricing point,” said Inglis, repeating that output would have to be competitive with US Gulf Coast LNG.
Kosmos exploration chief Brian Maxted said of the Mauritania/Senegal gas resources: “We are only four exploration wells into a giant petroleum system.” While drilling the recent Teranga well, it was clear that the source rock has liquid potential, he added.
Elsewhere in Africa, Maxted said that Kosmos had recently expanded its acreage offshore Sao Tome e Principe, the West African nation in the Gulf of Guinea, had recently expanded to 25,000 km2 across four continuous blocks.
Inglis worked for 30 years with BP, most recently as CEO of its exploration and production business, before becoming Petrofac CEO in 2010. He joined Kosmos as its CEO in March 2014. Maxted co-founded Kosmos in 2003, prior to which he was senior vice president of exploration at Triton Energy.
Mark Smedley