Senegal-Mauritania borderline development
A project straddling Senegal's northern maritime border could be signed off by the end of the year, despite its complexities
Exports from BP and Kosmos Energy's Greater Tortue gas development are scheduled to start up at roughly the same time as first oil from the SNE project further south, in around 2021. It will add another chunk of liquefied natural gas supply—about 2.5m tonnes a year, initially—to a well-supplied global market, albeit at what the partners say will be a competitive price.
Greater Tortue sits astride the Senegal-Mauritania border, and both governments will want the gas for their domestic market, so cross-border politics are in play. But BP is confident that both a final investment decision by the end of the year and start up in 2021 can be achieved, assuming Senegal and Mauritania continue to make headway with their International Cooperation Agreement for the project.
Some regional observers agree. "As things stand, we are expecting an agreement sooner rather than later," says David Thompson, a sub-Saharan Africa analyst at consultancy Wood Mackenzie. "These things always take longer than people expect, but there is nothing we've picked up on that raises major alarms bells."
Assuming deals are done, the result is likely to be a floating LNG-export project, underpinned by a long-term sales and purchase agreement, with potential for pipelines to run to both sides of the border to provide domestic supply.
The first find in Greater Tortue, a largely cretaceous play, was made in 2015, as part of a successful drilling campaign by Kosmos in 2015-16 that was enough to attract BP as a partner. It signed a deal in late 2016.
The terms of BP's agreement with Kosmos vary between Senegal and Mauritania, but the net effect is that, subject to government approval, BP has become operator and will hold around 60% of developments in both countries, with Kosmos holding around 30%.
The partners estimate that Greater Tortue holds around 20 trillion cubic feet of recoverable gas. Kosmos has also made discoveries further south, in Senegalese waters, including Yakaar and nearby Teranga in the Cayar Profond block, which hold estimated recoverable reserves of 15 trillion cf. Those resources could support production on their own, but the basin that holds all of these discoveries—and includes areas licensed to other explorers—could hold up to 100 trillion cf, according to BP.
The gas reserves to be exploited initially lie at some 2,700 metres of water depth, around 120km offshore. Given the potentially volatile wind and wave conditions in the Atlantic off this region of West Africa, mid-sized FLNG over the field is not an option. So, one idea under consideration is to tie back the subsea wells 80km to an FPSO, from where a pipeline will send the gas another 35km to the FLNG facility—a converted LNG tanker with a capacity of around 2.5m t/y—located around 10km offshore in 25-35 metres of water depth.
Even there, the FLNG vessel and the export carriers linked to it may still need protection from the elements, so BP is considering building a 1km breakwater situated on the international border to provide shelter.
20 trillion cf—Estimated recoverable gas in Greater Tortue
FLNG as a technology remains in its infancy, with few operational facilities to date, though by the time this project comes on stream, several others should be up and running, providing valuable experience. But the rest of the project is also operating towards the extremes of what's been done on the continent before—a challenge the company's boffins are relishing.
"These are some of the deepest wells in Africa and it would be one of the longest tie backs-our engineers absolutely love it," Géraud Moussarie, BP's head of country for Senegal, told Petroleum Economist.
Two pipelines taking a portion of production to both the Senegalese and Mauritanian markets are being discussed. Details have yet to be finalised, but there is talk of sending enough to supply a 250-megawatt power station on each side of the border to start with.
If this first stage of the project goes well, expansion is likely in the future, possibly using another FLNG facility and with more room for supply to domestic markets, potentially transforming power supply in both countries.
Moussarie said he was confident that the gas could be sold into the European market, at a price to compete with US LNG, even based on today's Henry hub price of around $3 per million British thermal units.
"The price is low and it's challenging, but at least we know what it is—so we have no excuse. We've got to work with the partners and the governments. And they do get it. If they didn't we couldn't be competitive," he said.
This article is part of a report series on Senegal. Next article is: Senegal moves towards first oil