Angola LNG exports face further delays
Angola LNG’s first exports, originally due to be shipped in Q1 this year, are being held up as construction of the project has yet to be completed.
GTR has learnt from market sources that it is unlikely that any LNG from the project, based in Soyo in northern Angola, will be shipped before the end of this year.
In May, Angolan oil minister Jose Botelho de Vasconcelos announced at the opening of the International Conference on Oil and Gas in Luanda that ships would be loaded that month and set sail in June.
What’s more, in July, Angola LNG issued a statement saying that first LNG was expected during Q3 this year.
Neither statement mentioned any infrastructural delays, and no comment was received from Angola LNG when contacted by GTR. The Angola LNG project was sanctioned in December 2007.
GTR’s sources say that the uncertainty over where the LNG will be exported to is also impeding progress on the project.
Rolake Akinkugbe, head of energy research at Ecobank, speculates on the eventual export destination: “Initially it was destined for the US, but then gas prices in the North American market have tanked in recent times due to growing shale production, while in Asia, for example Japan, LNG prices are have been close to US$16 per million metric British thermal units (MMBTU) over the last few months. Asia would be a more attractive market for LNG exports.”
Prices in the US have dwindled to as low as US$3/MMBTU.
The five-company consortium that makes up Angola LNG (Sonangol, Chevron, Total, BP and ENI) announced in mid July that they had created a new company to sell the project products internationally.
“ALM will be the exclusive marketer of LNG on behalf of Angola LNG Limited and will be active in tendering spot cargoes in addition to considering long-term sales,” says a statement issued by the company.
“EU and certain other merger clearances for the project have been obtained and the first contracts with customers will be signed shortly,” continues the statement, dated July 18.
Angola LNG Marketing (ALM) was created in the UK and will be based in London. Sonangol holds a 50% share in the marketing joint venture, Chevron has 23.6% and BP, ENI and Total each hold an 8.8% interest.
The Angola LNG project is expected to have an export capacity of 5.2 million tonnes a year. It will also provide butane gas for domestic use.
The project is the largest single investment ever made in Angola. Construction on the project began in 2008.