Africa LNG set to surge as floating projects cut time to reach market

Bloomberg

Africa is on the cusp of a liquefied natural gas (LNG) boom. That’s in part due to accelerating global demand. It’s also down to a fast-track method of getting the fuel to market.
Kosmos Energy Ltd’s project in Mauritania and Senegal, set to get the go-ahead next month, will use a floating vessel to convert gas from the offshore Tortue field into LNG. Such units, which can be built out of existing tankers, reduce the time from exploration to export, helping to lure investment and boost enthusiasm for gas development in a region traditionally focussed on oil.
“Africa is the hot spot for floating LNG,’’ said Lucas Schmitt, a senior gas analyst at consultants Wood Mackenzie Ltd. “Confidence in floating facilities is firming up.’’
Kosmos and partner BP Plc are targeting first gas from Tortue by 2022, bringing it online four years after Africa’s first floating LNG facility — a Cameroonian project that started output earlier this year. The last bureaucratic steps are on track and a final investment decision is just “weeks away,” Kosmos spokesman Thomas Golembeski said.

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Rising gas consumption in Asia is driving growth in global demand. That’s prompted a change in attitudes to African gas finds since the Tortue field was discovered in 2015, with developers now keen to tap the fuel rather than sidestepping discoveries in favour of oil. The Tortue discovery “was not met with jubilant praise,” said Tracey Henderson, senior vice president of exploration at Dallas-based Kosmos. “You went from ‘gas is valueless,’ to everyone trying to figure out how to monetize it.”
The project is just one of a slew of African LNG ventures expected to spur gas production on the continent. The expansion could see Africa’s total LNG output capacity almost double by 2030, according to consultants Rystad Energy SA.
That jump in output is aided by a series of floating projects. Confidence in the technology was boosted by the start of the Cameroonian venture this year, which was the first to use a production vessel converted from a ship. Completed largely on budget at around $1.2 billion, its success could trigger similar investments, potentially helping companies such as Ophir Energy Plc. Ophir needs funds for a project off Equatorial Guinea before its license expires at the end of the year. The company has been in talks with Chinese banks, but suffered a setback in May when key partner Schlumberger Ltd. pulled out.