Oil Producing Angola Sees Success in LNG
On July 24th, 2013, Angola LNG delivered its first cargo to Brazil. This 160.000 m3 cargo left Soyo in North Angola and unloaded one month later at Petrobras’ regasification terminal in Guanabara Bay, Rio de Janeiro. Within this success, the Angolan government proved its decisiveness in implementing natural gas projects in addition to its domination of the oil market.
Angola is not only the second largest oil producer in Africa south of the Sahara, but is also a country that saw flows in foreign direct net investment grew by 16 per cent last year, achieving a record of USD 43 billion in 2013 thanks to new discoveries of oil and gas.
A SUCCESS STORY
Artur Pereira, CEO, Angola LNG Marketing Ltd. commented on the company’s first cargo delivery, saying “our main priority is safe and reliable production and delivery of Angolan LNG to the world. We have demonstrated this with our first cargo.” The Chairperson of US oil company Chevron, John Waston, also told Agence Angola Press that “Angola LNG is a successful history because the first sale has already taken place, envisaging the continuous increase of the production in the coming months so as to confirm the success… We also talked about the commitment, in partnership with Angolan government, to implementing projects, both in oil domain and support for the communities”
The CEO’s objectives go far beyond this delivery. Angola LNG's full production capacity is 70 cargoes per year, supplying 5.2 million tons per year of LNG, plus propane, butane and condensate. To reach this objective, in the last five years Angola LNG executed a large number of master LNG sale and purchase agreements with energy companies across the world and the company says further agreements are currently being negotiated.
A JOINT PARTNERSHIP
Angola LNG is a major LNG producer with operations in Angola, and it operates one of the world’s most modern LNG processing facilities in Soyo, Zaire province. Angola LNG was formed as a joint project in 2008, involving Cabinda Gulf Oil Company, a subsidiary of Chevron (36.4%), along with Sonangol (22.8%), BP (13.6%), Eni (13.6%) and Total (13.6%). Sonangol and Chevron serve as co-project leaders. The shareholders will provide associated gas from their respective offshore oil fields.
Angola LNG has the potential to produce one billion cubic feet of clean gas per day for domestic and international markets. The company’s 30 year objective is to be a reliable and competitive supplier, a strong community partner, and a role model for the economic development of Angola. This vision involves such measures as minimizing flaring and environmental pollution by gathering associated gas from Angola's offshore oil fields to provide clean and reliable energy. It seeks also to meet the domestic market’s energy demand with LPG and natural gas.
OIL IN ANGOLA
The first commercial oil discovery in Angola was made in 1955 in the onshore Kwanza (Cuanza) basin. Since that discovery, Angola's oil industry has grown substantially, despite a twenty seven year civil war from 1975 to 2002. Today, Angola is the second-largest oil producer in Sub-Saharan Africa, coming after Nigeria. After the end of the civil war, the country experienced an oil production boom between 2002 and 2008 with the beginning of production in deepwater fields. In 2007, Angola became a member of the Organization of Petroleum Exporting Countries (OPEC).
NATURAL GAS RESOURCES
Despite the fact that the oil fields have matured and associated gas production declined, much of Angola's deep and ultra-deep water areas are considered to be highly prospective and remain to be explored. Angola has ample proven gas resources to supply a nominal 5.2 million tonnes per year, which is approximately equivalent to 6.8 billion cubic meters per year.
In mid-2013, Angola launched the Angola LNG project, a recent start-up of the LNG plant at Soyo. In the next decade, Angola hopes to commercialize more of its natural gas resources for export and for domestic consumption. However, Angola’s natural gas production still remains in small quantities, as the vast majority of the country's gross production is flared or re-injected into oil wells. In 2012, 91% of gross natural gas production was re-injected, vented or flared because most of the resources are coming from associated fields, although Angola LNG, the operator of the facility, plans to develop some previously discovered non-associated natural gas fields
DELAYS AND NEW PLANS
Angola LNG project represents the largest single investment in Angola's history. The LNG plant is currently operating below capacity because of technical problems, and exports are hardly ready to increase. Initial plans called for Angola's LNG cargoes to be shipped to a U.S. re-gasification facility in Pascagoula, Mississippi in. However, U.S. natural gas imports have declined drastically because of the shale gas revolution in North America. Angola LNG has already adapted its strategy to new market conditions and is now targeting consumers in Asia and Europe, although its first cargo was shipped to Brazil.