Senegal enters the Liquefied natural gas race with significant offshore discoveries

At present when it comes to emerging Liquefied Natural Gas, the eyes of the world are on Africa’s eastern coast and the activities around Mozambique, but that could be about to change. While not currently amongst the continent’s top oil and gas producers, Senegal plans to alter that in the coming years. On the back of some substantial deepwater finds, the West African nation is predicted to become a hot spot during the next decade for relatively low-cost LNG clusters.

Senegal, where oil was discovered in 1961, expects all its offshore projects to come online between 2022 and 2026. According to the International Monetary Fund, between 2014 and 2017, oil and gas reserves worth more than 1 billion barrels of oil and 40 trillion cubic feet of gas, most of it shared with Mauritania, were found. Two large fields in Senegal are currently being developed – Australia’s Woodside Energy is developing the SNE field and BP/Kosmos Energy the Greater Tortue Ahmeyim project.

Full speed ahead for Tortue

BP took the final investment decision (FID) on the Mauritania-Senegal FLNG plan late last year. The Greater Tortue Ahmeyim LNG project will produce around 2.5 million tonnes per year, with first gas expected in 2022. There are expansion plans for a hub on Yakaar-Teranga and one on Birallah. The Orca well, which is expected to be spudded in October, would go to supporting the Birallah hub and the first phase will provide domestic gas and data for the producers. Senegal launched a development plan in 2014, with Kosmos saying gas from the offshore fields would go to supporting this.

In September Kosmos Energy and its partners BP and confirmed that the Yakaar-2 appraisal well has encountered approximately 30 meters of net gas in a similar high-quality Cenomanian reservoir to the Yakaar-1 exploration well, continuing the 100 per cent success rate of wells targeting the inboard Mauritania/Senegal gas trend.

According to Kosmos the results from the well prove that the Yakaar-Teranga resource base is world-scale and has the potential to support an LNG project that provides significant volumes of natural gas to both domestic and export markets. Development of Yakaar-Teranga is expected in a phased approach with Phase 1 providing domestic gas and data to optimise the development of future phases. It will also support the country’s “Plan Emergent Senegal” launched by the President of Senegal in 2014. Kosmos has said it intends to sell down its stake in the project. It is seeking a carry for its development costs, in order to focus on its expertise in exploration.

SNE Deepwater Oil Field

The SNE Deepwater Oil Field is located in the Rufisque, Sangomar, and Sangomar Deep Blocks, which cover a combined area of 7,490km² within the Senegalese portion of the MSGBC Basin. The field is one of the world’s largest oilfields discovered in the last decade and is being developed in a joint venture between Cairn Energy (40%), Woodside Energy (35%), FAR (15%) and Petrosen (10%), with Woodside Energy the project operator.

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When Cairn drilled the first deepwater wells offshore Senegal in 2014 it made two basin opening discoveries, one of which, the SNE field, the largest global oil discovery of 2014. Since then, the region has evolved from a frontier basin to an emerging oil play attracting the attention of the global industry. Last year significant progress was made on the development with a number of key milestones achieved. Woodside assumed the role of operator and the Joint Venture (JV) is targeting a final investment decision in H2 2019 and first oil in 2022.

The planning is for the field to be developed through a stand-alone Floating Production Storage Offloading (FPSO) vessel facility with a capacity of around 100,000 bopd, with 23 subsea wells and supporting subsea infrastructure. It will be designed to allow subsequent SNE development phases, including options for gas export to shore and for future subsea tiebacks from other reservoirs and fields.

Early this year approval in principle for the technical basis of the project along with confirmation that the licence covering the development area would be extended to allow for the conclusion of FEED and to mature financing activities during 2019 prior to Exploitation Licence award.

“The region has now evolved from a frontier to an emerging hydrocarbon opportunity attracting the attention of the global industry,” Eric Hathon, Exploration Director at Cairn Energy, said. “In the last three years, we have operated three safe and successful drilling programmes and laid the foundation for a multi-phase development plan.”

“We are committed to delivering lasting and social economic benefits in Senegal, including, energy security and revenues, employment, development of an infrastructure and social investment,” Mr Hathon continued. “Cairn’s belief is that the discovery and development of sustainable oil production will greatly benefit the national economy and local population.”

Licensing round

On the back of this success, Senegal has announced a second licensing round that was due in late October but has now been delayed because of internal political issues until the first day of the Africa Oil Week conference in Cape Town. The new licensing round will be open for six months and will seek developers for ten to twelve offshore fields. This year’s event in Cape Town will provide a great opportunity to learn more about Senegal and its opportunities in the next licensing round with Mouhamadou Makhtar Cissé, Minister of Petroleum and Energy Senegal and Joseph Medou, E&P Director, Petrosen, both speaking at the event.