London, United Kingdom, 9 May – Angola’s liquid natural gas (LNG), which is due to start being produced in the next few months, is raising the interest of international investors, who have several projects in the design stages, according to the Economist Intelligence Unit (EIU).
Sonangol, the concession holder for Angola’s oil and natural gas, recently announced that natural gas production would begin in November of this year and that exports would start in the first quarter of 2012, in line with the schedule, the EIU noted in its latest report on Angola.
The Soyo unit, which is the result of an US$8 billion project led by US company Chevron and is part-owned by Sonangol, will “provide a very necessary drive to the area’s facilities,” it said.
Sonangol will also have a stake in the terminal to transform the LNG into gas in the United States, to where Angola’s LNG will be headed.
“Several other liquid natural gas projects are at the design stage,” said the report on Angola.
According to initial estimates, The Angola LNG project is expected to add over US$1 billion per year to Angola’s exports by the end of the decade, by using gas taken from the oil fields of Cabinda and blocks 14, 15, 17 and 18 which is currently burnt off.
The EIU thinks it is unlikely, however, that Angola will become, “a globally significant exporter,” of that fuel, given the known size of its reserves.
According to the CIA World Factbook, Angola’s proven reserves stand at around 272 million cubic metres, and are amongst the top 40 in the world.
These proven reserves increased more than five-fold from 2007 to 2008, with the discovery of some 220 billion cubic metres, the EIU said.
However, estimates published by Angolan news agency Angop pointed to amounts of some 11 trillion cubic feet (311 billion cubic metres), which would put Angola amongst the top ten world producers.
In the last few years, the Consultation Council of the Angolan Oil Ministry has encouraged creation of a legal and contractual framework to encourage research, development and production of natural gas in Angola.
At the same time, Sonangol is expected to invest in research, evaluating information at oil concessions to identify potential natural gas resources. Natural gas is often located in oil wells.
Another area in which Sonangol is moving ahead is in domestic fuel distribution by planning to open 200 new supply stations, in order to take advantage of an expected 10 percent rise in fuel consumption over the next four years.
Together with Portugal’s Galp Energia, Sonangol currently operates around 400 fuel stations although the country is still dependent on refined fuel imports to meet domestic demand.
The new Lobito refinery remains on paper due to “difficulties obtaining financing,” that have meant the launch of the project is now only planned for the end of 2014.
The EIU for this year points to growth of the Angolan economy of 7.9 percent, as compared to 1.7 percent in 2010.
With the current high price on the international market, oil production is also on the increase, from 1.78 million barrels per day last year to 2.1 million in 2015, according to EIU projections. (macauhub)