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Gas Development and Commercialization
Corporate Council on AfricaAfrica Oil & Gas Forum – Houston, TexasNovember 30th 2004
‘Demola Adeyemi-BeroNew Business Development Director – Africa
. Gas Touches Our Lives In So Many Ways . Gas Touches Our Lives In So Many Ways
Electricity Fertilizers
Fuel Industrial Feedstock
S. & Cent. America7.19
North America7.31
Asia Pacific13.47
Africa13.78
Europe & Eurasia62.30
Middle East71.72
Trillion Cubic Meters
Major Gas Resource – Major Gas Resource – Africa has significant reservesAfrica has significant reserves
… .Proximity to the key markets
Source: bp statistical review 2004, Cedigazs, Shell estimates)
The increasing role of African LNG in the Atlantic Basin
Source: bp statistical review 2004, Cedigaz , Shell estimates
1659
910
176
(Nigeria Reserves tcf )*
268
(N Africa Reserves tcf )*
236
942
* (2003 Proved Gas Reserves tcf )
0
10
20
2003 2010 2020
/Bcf d
8%
17%
0
10
20
2003 2010 2020
/Bcf d
8%14%
17%
/Bcf d
0
10
20
2003 2010 2020
2%
9%14%
/Bcf d
0
10
20
2003 2010 2020
2%
9%14%
. N America LNG Demand( )and LNG share of supply Europe LNG Demand
( )and LNG share of supply
Continent’s Gas Are Concentrated In Few countriesContinent’s Gas Are Concentrated In Few countriesGas in Africa
• 2 > 100 countries TCF
•5 > 10 countries TCF
Nigeria176.4 TCF
Libya 46.4 TCF
Angola14 TCF
Egypt62 TCF
2.4
6.0 1.6
1.4 Algeria
159.7 TCF
4
3
1.3
...But the discovered Gas Resources are in a few Countries...But the discovered Gas Resources are in a few Countries
Source: BP, IHSE
6.0 1.0
Commercial Gas Development Projects in Africa 5 ;could be grouped into categories
•Gas – to – LNG/LPG
•Gas – to – GtL
•Gas into Pipeline
•Gas – to – Power
•Gas – to – Petrochemicals & Products
..... and current Pipeline dominated by Export Projects in MRH..... and current Pipeline dominated by Export Projects in MRH
LNG/LPG
200520062007
GTL
Pipeline
<20042008
Alba LNGTrain1
Angola LNG
>= 2009
Brass LNG
Damietta Gas
Train 1
Damietta Gas
Train 2
Egyptian LNG( ELNG 1)
Egyptian LNG( ELNG 2)
Egyptian LNG( ELNG 3)
Gassi TouilLNG
Nigeria LNG 4&5
Nigeria LNG 6
Damietta
Ohanet/InAmenas
Sanha
WLGP
BiokoIslandNLNG Expansion
Escravos GtLSasol
Petro chemicals
AMPCOHasi R’ Mel
ArishAqaba
W. LibyaGas
ProjectIn Salah
Medgaz
West Africa Gas PipelineNigeria-Algeria Gas Pipeline
Power KuduAfam
SongoSongo
Kwale
– Shell Global leader in LNG
Gas production LNG supplyLNG marketsGTL plantOther Africa LNG Development
• 2nd largest producer• Positioned in key
markets– #1 in Asia Pacific– #2 in Europe– #3 in North America
• Largest supplier of equity LNG
• GTL leader
LNG Projects in Africa have been a successLNG Projects in Africa have been a successPresent and Future World LNG Capacity
Mtpa
-
IndonesiaAlgeria
MalaysiaIndonesiaNIGERIA NIGERIA Australia
QatarBruneiOman
AlgeriaAbu Dhabi
QatarTrinidad
US (Alaska)Libya
NorwayEgypt
VenezuelaF-E Russia
BADAKARZEW BINTULUARUNNLNGNLNGNW SHELFQATARGASLUMUTQALHATSKD/CAMELDAS ISLAND RAS LAFFANATLANTICKENAIMARSA E.B.SNOHVITDAMIETTASUCRESAKHALIN
IndonesiaAlgeria
MalaysiaIndonesiaNIGERIA NIGERIA Australia
QatarBruneiOman
AlgeriaAbu Dhabi
QatarTrinidad
US (Alaska)Libya
NorwayEgypt
VenezuelaF-E Russia
BADAKARZEW BINTULUARUNNLNGNLNGNW SHELFQATARGASLUMUTQALHATSKD/CAMELDAS ISLAND RAS LAFFANATLANTICKENAIMARSA E.B.SNOHVITDAMIETTASUCRESAKHALIN
15 20 250
5
10
0
5
10
Current CapacityDebottle./RevampingUnder ConstructionProjected
0 5 100 10
0 5 10
ASound &Balanced Gas Business in any … country should be based on
SolidDomestic
/
DemandMarket
Export MarketPosition
-Gas Driven
Power &Industrial
Base
A successful Gas Business that fosters economic & industrial
6 ;growth requires key e lements
• Major Gas Resource Base
• Sustained Market Demand Growth (Domestic & Global)
• Attractive (Stable) Gas Price (Domestic & International)
• Attractive & competitive Investment Business environment (Fiscal & Legislative)
• Capable of Sustainable Development– (People, Planet & Profit)
• Participation of all the key stakeholders
Hence a view of Africa against the key elements… …
• Major Gas Resource Base
• Sustained Market Demand Growth (Domestic & Global)
• Attractive (Stable) Gas Price (Domestic & International)
• Investment friendly Business environment (Fiscal & Legislative)
• Sustainable Development –(People, Planet & Profit)
• Participation of all key Stakeholders
.Lack of National &Regional Gas Infrastructure .Lack of National &Regional Gas Infrastructure
.Limited Domestic Gas Demand .Limited Domestic Gas Demand
.Immature Gas Resource Base .Immature Gas Resource Base
- Un attractive investment climate for gas- Un attractive investment climate for gascommercialisationcommercialisation
The gaps to date are essentially…The gaps to date are essentially…
The Staircase for Gas Development & CommercialisationThe Staircase for Gas Development & Commercialisation
National Gas Policy and Gas Master plan(Role of Gas in overall National Economic Strategy)
Regulatory and Legislative FrameworkPricing, Fiscal terms, Incentives, Contracts
Infrastructure development & Capacity BldgGovernment led (i.e. financing for key infrastructure)
Dynamic Gas Management Model(Manage Demand & Supply Dynamics)
Liberalization and Privatization
Industrial MarketEPZ, Industrial parks
Domestic MarketSubsidies, target pricing
Evolution of the Gas BusinessEvolution of the Gas BusinessCompetitive Structure
OwnershipStructure
MonopolyChoice for
TransportersChoice forDistributors
Choice forEnd Customers
GovernmentOwnership
PublicCorporation
PrivateCorporation
Liberalisation Trend
Privatisatio
nT
rend
IProjectsDevelop
• Stage I: Small or no existingmarket, few competitors,emerging regulations, limitedinfrastructure, and high risk
• Stage II: Industry developsrapidly, the number of participantsincreases, regulations are clarified,and infrastructure is put in place
• Stage III: Mature infrastructure,slowing market growth,deregulation, privatisation, and,ultimately, market segmentation
• Stage IV: Fully competitivemarketplace, flat or decliningmargins, consolidation and ahigh level of efficiency
IndustryDevelopment
IIIndustryDevelops
IIICompetitionDevelops
IVEfficient Market
Develops
Nigeria