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Yakaar-Teranga gas to prioritise Senegalese market

Kosmos and BP have found more gas in Senegal, but further LNG exports will have to wait

First production from developments based on the Yakaar-Teranga gas resources off northern Senegal are set go to the domestic market, according to the regional head of Dallas-based producer Kosmos Energy, with LNG exports to follow later. 

“It is envisioned that phase one of the Yakaar-Teranga gas development would be a domestic gas phase,” Todd Niebruegge, head of the Mauritania-Senegal business unit at Kosmos Energy tells Petroleum Economist. 

The Atlantic Margin focused E&P firm   in late September  that results from its Yakaar-2 appraisal well had “proved up” the southern extension of the field. The well encountered 30 metres of net gas pay in a “similar high-quality Cenomanian reservoir” to the discovery made by the Yakaar-1 exploration well it drilled 9km away in 2017. 

Kosmos takes the exploration lead in licences it shares with majority stakeholder BP across a swathe of gas-prone acreage in northern Senegal and southern Mauritania. This includes the cross-border   gas production project, which BP is now developing in collaboration with both countries and from which exports are due to start in 2022. 

“We are ready to move forward with development activities” Niebruegge, Kosmos

Kosmos is currently in farm-in talks with multiple parties over reducing its stakes across the Senegal/Mauritania basin to 10pc. It currently holds 30pc in the Senegal venture and 28pc in Mauritania. 

The firm estimates Yakaar-Teranga could hold more than 20tn ft³ of gas in place, plenty for an LNG project, although more work will be needed to firm up its potential. “Some additional appraisal activity will be accomplished through the first phase, which will be necessary to underpin a bigger LNG project. But our view is that we are ready to move forward with development activities,” says Niebruegge. 

His view chimes with the Senegalese government’s objective of bringing more gas to the domestic market, after the Greater Tortue project prioritised LNG exports. The Plan Senegal Emergent development model prioritises access to and cost of power for investment, aiming to transform the country into an emerging economy by 2030. 

Before that can happen, talks between the operating firms and state oil firm Petrosen would need to agree on a phased-approach concept. Discussions over the volume of gas to be supplied and its price would also be required. 

“The formal approval process has yet to take place,” says Niebruegge. He believes that, if talks over the next 12-18 months result in a deal, first gas from Yakaar-Teranga could be flowing into Senegal by 2023. 

That process would also involve consideration of gas supply agreements with the SNE oil and gas development, led by Australia’s Woodside, off central Senegal, where the partners hope to make FID in the coming months.    

New LNG concept 

The phased approach to Yakaar-Teranga is not just about keeping the Senegalese government happy, it also enables BP and Kosmos to stagger the rollout of LNG projects. That would enable technology deployed in future phases of Greater Tortue to be applied to Yakaar-Teranga—along with the lessons learned—leading to cost and time savings, Niebruegge says. 

The first phase of Greater Tortue revolves around a 2.5mn t/yr floating LNG facility developed by Norway’s Golar, and sheltered by a breakwater 10km offshore. But future expansion there and any Yakaar-Teranga export project could employ a different approach. 

20trn ft³ Gas in place at Yakaar-Teranga

One concept under consideration is for the plant to be built on a fixed platform in shallow water, protected by the Dakar peninsula or a breakwater. “It is smaller-scale nearshore LNG, which conceptually is not drastically different from Golar’s [facility]. But it would not be floating, and it would be constructed by BP,” says Niebruegge.     

An onshore LNG plant is another possibility but could prove more expensive, as it may need to be built well inland to protect it from flooding, resulting in the need for costly pipeline infrastructure to transfer LNG to tankers in deep water.   

The drillship used for Yakaar-2 is now being transferred to Mauritania where it will drill the Orca-2 well. Kosmos hopes that, if the well establishes sufficient reserves, it can move ahead with the mooted Bir Allah LNG development in the region.

Source: Petroleum Economist



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