PetroSA is understood to be considering importing CNG to keep its 45,000 barrel per day Mossel Bay GTL refinery operational, although it has abandoned plans to import LNG.
While PetroSA has not publically announced the CNG plans, Interfax understands that in April the company sent out a request for advice pertaining to a project to import 80 PJ (2.1 billion cubic metres) of CNG per year from Sasol’s gas fields in southern Mozambique.
The basic outline of the project is to pipe gas from Sasol’s central processing facility near Inhassaro in Mozambique 200 km south via an onshore pipeline, to an offshore loading bay facility in Inhambane. The CNG would then be shipped approximately 1,850 km to a receiving terminal at Mossel Bay and piped 20 km to the Sasol’s GTL facility.
Interfax understands PetroSA has already signed a memorandum of understanding (MOU) with Sasol Petroleum International to negotiate a sales and purchase agreement for gas from the project from Sasol’s Pande and Temane fields in southern Mozambique. Sasol could not confirm an MOU had been signed at the time of going to press.
Sasol already supplies gas to its South African network from Pande and Temane via an 865 km pipeline.
PetroSA announced on Tuesday it would no longer pursue a project to import LNG via an FSRU at Mossel Bay because the location was too technically and commercially challenging. A feasibility study conducted by WorleyParsons “found meteorological and oceanographic conditions in Mossel Bay are severe and would inevitably increase the logistical and overall gas supply costs of the project”, the national oil company said in a press release.
The challenging location would not necessarily hinder CNG imports, however, which require “minimal facilities with a significantly smaller footprint compared with LNG”, said Lyndon Ward, marketing director for Calgary-based maritime CNG specialists Sea NG.
The volumes and relatively short distances involved in importing gas from Mozambique into Mossel Bay also favour CNG. “CNG systems are typically
less costly than LNG when the transport distance is less than 2,000 km and the volume is below 14 million cubic metres per day,” Ward added.
While costs vary from project to project, estimates for the transportation tariff to import around 2.1 bcm of gas over 1,500 km would be around $4-5/MMBtu – plus gas supply costs – based on a 15-year term, according to Sea NG calculations.
PetroSA’s GTL plant is already running at 50% of its capacity because of dwindling feedstock. Gas supplies from PetroSA’s FA-EM and South Coast gas fields, as well as the Oribi and Oryx oilfields in Block 9, are expected to dry up completely within the next two-to-three years.
A maritime CNG import project – which could theoretically be online 26-30 months after an FID – could just about meet PetroSA’s feedstock deadline.
However, for now PetroSA is focusing on bringing new domestic gas fields online. The company started drilling at its F-O field, 40 km southeast of its FA production platform off South Africa’s southern coast, in January 2013. Gas from the first of the five wells in the programme is expected before the end of 2014, a spokesperson told Interfax. Drilling is scheduled for completion in mid-2015.
French oil major Total also started exploratory drilling in South Africa’s deep offshore this summer. Gas from Block 11B/12B, around 175 km from Mossel Bay, could also be used to supply the GTL facility. However, exploration is still in the very early stages.
28 August 2014