Angola LNG Project, Angola

The long-anticipated Angola LNG project is an integrated gas utilisation scheme comprising both offshore and onshore operations to commercialise gas resources from the country's offshore blocks and boost the development of a future natural gas based industry.

In December 2007, the final investment decision was made on the project after years of planning which began back in the 1990s, Angola's government and state operator Sonangol giving a green light to the project consortium to begin its development.

LNG TRAIN

The programme involves the construction of a single Liquefied Natural Gas (LNG) train with production capacity of 6.8 billion cubic metres a year (5.2 million tons) adjacent to the coastal town of Soyo, some 350km north of Luanda. Consuming around one billion cubic feet of gas a day, the plant has a projected lifespan of 30 years and with a cost of $4bn, the project represents the largest single investment in Angolan history. First production is expected in the first quarter of 2012.

Chevron is the lead partner through its subsidiary, Cabinda Gulf Oil Company, owning a 36.4% share. The other consortium members are Sonangol, the national oil company – as Sonagas – with 22.8%, having sold 13.6% to Eni in 2006, BP and Total also holding 13.6% apiece.

RESERVES AND RESOURCES

Most-likely natural gas resources amounting to 297 billion cubic metres (10.5 trillion cubic feet) have been identified, the plant's primary source of supply in the early years of operation being from associated fields, helping to reduce gas flaring and facilitate oil production.

It is anticipated that non-associated gas from previously discovered gas fields will ultimately form the feed to the plant, as oil fields mature and associated gas production declines. Much of Angola's deep and ultra-deep-water areas are considered highly prospective and still await exploration.

Gas resources arising from a number of blocks have been exclusively designated for the project. These reserves, lying in water of up to 1,500m in depth are to come from blocks 0 and 14 (Chevron), 15 (ExxonMobil), 17 (Total) and 18 (BP), along with future ultra-deep water blocks and previously discovered non-associated gas fields in blocks 1 and 2.

The gas produced in these designated blocks will be transported onshore to the new LNG plant by high-pressure pipelines, to undergo conditioning and extraction of the natural gas liquids before liquefaction to LNG.

THE SOYO LNG PLANT

Work on the preparation of the plant site is to be carried out by a Boskalis International / Jan de Nul Dredging joint venture, with the necessary advanced engineering and procurement being awarded to Overseas Bechtel.

The plant itself will benefit from the ConocoPhillips-Bechtel Global LNG Collaboration, utilising ConocoPhillips's Optimised Cascade LNG process to produce LNG from the feed derived from the offshore gas fields. The new plant will also process propane and butane LPGs and condensate as well as providing Sonangol with up to 125 million cubic feet of gas daily for the domestic market under gas supply, sales and re-gas agreements.

Construction work will also include storage and marine loading facilities for LNG, LPG and condensate.

MONETISING THE GAS MARKET

The first gas is expected to be shipped from the plant in 2012 to the Gulf LNG Mississippi regasification terminal – to be built near Pascagoula and due to be operational by 2009 – for subsequent sale throughout the US. A subsidiary of Sonangol has a 30% holding in the $1.2bn project, while the facility itself has a 20-year supply deal with Sonangol.

The upshot is widely expected to establish Angola as a primary competitive source of LNG for a global and fast-developing natural gas market. As a result, the Angola LNG project is set to bring a number of national benefits, including commercialising natural gas resources, prioritising the further exploration of oil and natural gas and, by providing a source of natural gas for domestic use, stimulate further economic growth.

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