Tanzania LNG Our vision...3. Manifold 2. Deepwater wells 4. Pipeline 8. LNG Carrier 5. Onshore gas...
Transcript of Tanzania LNG Our vision...3. Manifold 2. Deepwater wells 4. Pipeline 8. LNG Carrier 5. Onshore gas...
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2018/19
Tanzania LNG
Our vision
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WHO WE ARE
Over
80 years in Tanzania
SHELL IN TANZANIAShell’s activities in Tanzania began in the 1930’s with fuels and lubricants as the main business. In 2016, the company expanded its presence through the BG Shell combination as operator, of two offshore blocks (Block 1 and Block 4) in the southern region of Tanzania, together with its partners, Ophir Energy and Pavilion Energy.
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Over
90% success in exploration discovery rate
22 wells drilled
23 TCF gas in place
SHELL’S EXPLORATION CAMPAIGNS
TANZANIA
DAR ES SALAAM
Block 4
Block 2
200 KM
125 KM
LINDI
MTWARA
Block 1
BLOCKS 1 AND 422 wells were drilled during extensive exploration activities in the two blocks, resulting in 23 Trillion Cubic Feet (TCF) of gas in place discovered, and over $2 billion invested to date.
Currently, Shell and its partners are working with the Government through Tanzania Petroleum Development Corporation (TPDC) to find the most cost-effective and efficient way to develop a multi-billion-dollar Liquefied Natural Gas (LNG) project.
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3. Manifold2. Deepwater wells
4. Pipeline
8. LNG Carrier
5. Onshore gas pre- treatment
6. LNG trains
7. Storage
INDIAN OCEANTANZANIA COAST LINE(NEAR LINDI)
TO DOMESTIC MARKETS
TO INTERNATIONAL MARKETS
-160˚C
2,500M WATER DEPTHS
100 KM BETWEEN SHORELINE AND DEEPWATER WELLS
2,500M BELOW SEABED
1. Natural gas reservoirs
LNG is natural gas that has been cleaned and cooled in huge refrigeration units to a temperature of around -162oC. The LNG process converts the gas into liquid, substantially reduces the volume of the gas more than 600 times. This is similar to shrinking a football to the size of a marble. This makes the gas easier to store and transport safely to markets around the world in purpose-built ships.
THE PROCESS
LIQUEFIED NATURAL GAS (LNG)
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3. Manifold2. Deepwater wells
4. Pipeline
8. LNG Carrier
5. Onshore gas pre- treatment
6. LNG trains
7. Storage
INDIAN OCEANTANZANIA COAST LINE(NEAR LINDI)
TO DOMESTIC MARKETS
TO INTERNATIONAL MARKETS
-160˚C
2,500M WATER DEPTHS
100 KM BETWEEN SHORELINE AND DEEPWATER WELLS
2,500M BELOW SEABED
1. Natural gas reservoirs
Up to 2,500m water depths
Up to 2,500m below seabed
Up to 100km distance from the shore
The offshore deepwater gas in the south of Tanzania is located in fields over 100km offshore, and some are in water that is up to 2,500m deep and 2,500m below seabed. Distance between the fields can also be over 100km apart. Depth, distance and terrain means the Tanzania LNG
project is at the cutting edge of deep sea exploration technology and provides a unique opportunity for developing unique competencies and capabilities in the local supply chain and within TPDC as the project tackles these technical obstacles.
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WHY LNG?
0
500
1000
1500
2000
2500
Volume required toeconomically develop
deep water gas
2 train LNG Fertiliser plant Power plant Industrial customer
Gas consumption (units in mmscfd)
The size of the discoveries off the coast of Tanzania and the associated cost of developing the deepwater gas fields to bring the gas to shore require a ready market for the gas to substantiate the multibillion dollar investment.
Local demand from industry, power generation, fertilizer and potential exports to the wider region will play an important part of the market for the offshore gas in the future but the current demand and associated infrastructure required to deliver the gas to end users, needs substantial development before reaching critical mass for this size of investment.
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Liquefying the gas into LNG and the ability to transport it on ships opens the global gas market to Tanzania’s offshore Deepwater gas. Tanzania’s geographical proximity to the Indian, Chinese and European markets puts the country in a unique position to take advantage of those growing markets . And, there will be sufficient gas for the domestic market too.
0
500
1000
1500
2000
2500
Volume required toeconomically develop
deep water gas
2 train LNG Fertiliser plant Power plant Industrial customer
Gas consumption (units in mmscfd)
4% growth rate on LNG global demand
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Peru LNG
Atlantic LNG
Sakhalin
Elba LNGEgypt
MalaysiaNigeria LNG
Qatar Gas 4
Oman LNG
LNG Canada
Brunei LNG
Prelude
North West ShelfGorgon
QCLNG
SHELL LNG PROJECTS AROUND THE WORLD
Shell is the most experienced LNG developer with many liquefaction plants in its portfolio which produce some 41 million tons of equity LNG per annum.
Shell has been running a large R&D effort dedicated to LNG for decades. It continues
to employ a significant dedicated technical team to work on optimum designs and development solutions. The company’s in-house LNG development and operations expertise is also employed to mitigate project development risks and ensure world-class reliability.
Shell LNG
Under construction
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Peru LNG
Atlantic LNG
Sakhalin
Elba LNGEgypt
MalaysiaNigeria LNG
Qatar Gas 4
Oman LNG
LNG Canada
Brunei LNG
Prelude
North West ShelfGorgon
QCLNG
12 existing liquefaction plants in production and
3 under construction
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OnshoreLNG Plant
SubseaFacilities
23 Tcfof gas in place
Supply to Domestic Market LNG enables domestic gas from deep water discoveries
Domestic gas = industrial users + electricity
Revenues + taxes paid + GDP (8%)
Direct employment = planning + construction + operations
Indirect employment = planning + construction + operations
Goods + services purchased
Social investment
Skills + workforce development
Community development
Access to energy
LNG PROJECTBENEFIT FOR TANZANIA
The LNG project will serve as an important ingredient in supporting Tanzania’s vision for industrialization. This project creates a commercial basis for the vast offshore gas fields to be developed and to make gas available for local and international markets.
Major benefits: ■ The government stands to receive more than half of the total project income through share of the production allocated to the Government as well as the tax paid by the investor to the Government.
■ In addition to profit share and tax, the Government also benefits as a participating investor in the project though TPDC.
■ The multiplier effects from the LNG value chain will produce significant government revenues.
■ Domestic gas for power generation and industrial development.
■ Multiple opportunities for local businesses ■ An influx of jobs, new infrastructure
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OnshoreLNG Plant
SubseaFacilities
23 Tcfof gas in place
Supply to Domestic Market LNG enables domestic gas from deep water discoveries
Domestic gas = industrial users + electricity
Revenues + taxes paid + GDP (8%)
Direct employment = planning + construction + operations
Indirect employment = planning + construction + operations
Goods + services purchased
Social investment
Skills + workforce development
Community development
Access to energy
If successfully implemented, the LNG project will be deemed the largest project ever realized on Tanzanian soil estimated to cost around $30 billion.
Key Benefits
Up to $30 billion investment
Up to $2 billion invested so far
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The Tanzania LNG project is at the planning phase (foundation stage) requiring multiple agreements between the International Oil and Gas Companies (IOCs) and the host government.
The LNG plant will create the scale to allow the development of the offshore resources for both the domestic and international markets.
THE PHASES OF THE LNG DEVELOPMENT PROCESS
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THE PLANNING PHASE: STATUSFEEDDecision
Pre - FEEDDecision
First Gas
Final InvestmentDecision
ProjectFoundation
Pre - FEED FEED Execution
Timinguncertain
Minimum 18Months
Minimum 2Years
4-5 years
Project Timeline Flow
FEED: Front End Engineering Design
Exploration phase
several years
Seismic surveys and Drilling
Planning phase
several years
Commercial and technical evaluation and design
Construction phase
4 – 5 years
Construction of LNG plant, pipelines etc
Operations phase
30 – 40 years
Extraction, processing for domestic use and liquefaction for export
De-Commission phase
2 – 3 years
Closure of LNG operations
WE ARE HERE
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Seamless integration of upstream projects with LNG facility create a competitive project: This provides the required economies of scale and cost efficiency to maximise returns from the project to the host Government as well as investors.
LNG TANZANIA BECOMING A REALITY
Key success factors
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Good partnership between host Government and investors makes a successful megaproject. ■ Supportive government policies and legislative framework are key for project stability and predictability.
■ Agreement on key terms for a win win outcome is important for both the government and investors.
Capable investors: ■ Companies with the best technology, knowhow, financial staying power.
■ Competitive strength in Global LNG market.
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POWERING PROGRESS TOGETHER
Leader in the LNG industry with over 50 years’ experience
ContactExternal Relations Shell Exploration and Production Tanzania LimitedKilwa House, Plot 369 Toure Drive, Oysterbay, Dar es salaam, TanzaniaTel: +255 22 2218206www.shell.co.tz