While Angola is the fastest growing African oil producer, it will also be the next country on the continent to gain a liquefied natural gas (LNG) sector.
LNG is produced by turning gas into a liquid that can be transported by ship to ports around the world, where it is turned back into a gas for distribution via local pipelines.
Its production is expensive because liquefaction and regasification plants need to be developed at either end of the marketing chain but no long distance pipelines are required and producers have the freedom to supply many different markets rather than just one via a single dedicated pipeline.
Angola may absorb more gas in the future in its own gas fired power plants and South Africa could also be an option for piped gas, but at present LNG represents Luanda's best chance of making commercial use of its gas reserves. In December, the Angola LNG consortium agreed to proceed with the construction of an LNG production plant at Soyo in Zaire Province, around 350km north of Luanda. It will have production capacity of 5.2m tonnes a year in a single production line, known in the industry as a train.
The company is owned by Sonangol Gas Natural (Sonagas) (22.8%), Chevron subsidiary Cabinda Gulf Oil Company (36.4 %), BP (13.6%), Total (13.6 %) and Eni (13.6%).
The actual production train, storage facilities and liquefied petroleum gas (LPG) operations will be constructed by engineering firm Bechtel and ConocoPhillips and first production is due in early 2012.
Gas will be supplied by fields on blocks 14, 15, 17 and 18, helping to cut routine gas flaring in the country. The LNG is expected to be shipped to Gulf LNG's terminal in Mississippi for distribution in North America. Nigeria's lead in the LNG sector, however, seems assured. Nigeria Liquefied Natural Gas (NLNG) has established itself as a gas supplier of global importance through its plant on Bonny Island.
The company, which is owned by Nigeria National Petroleum Corporation (NNPC) (49%), Shell (25.6%), Total (15%) and Eni (10.4%), brought its sixth train on stream in December and hopes to complete testing on it soon to bring total production capacity at Bonny Island up to a massive 22m tonnes a year. NLNG is now considering the development of a seventh train, which would be its largest yet.
Yet while NLNG contemplates output of 30m tonnes a year, other investors are considering projects that would collectively install just as much production capacity.
Brass River LNG...