Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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For 2022. The average gas price was $3.69 mcf spread across 8 contracts for 2022.
Revenue was $212.5m ($181.1m for gas, $29.8m for oil and condensate and another $1.6m for handling 3rd party oil).
If we were doing 200-220 mmcf/d consistently it would be $270m - $300m plus another $30m+ oil from S.Creek.
So to run consistently at 200 - 220 mmcf/d at present capacity or when the compression project completes it could generate an additional $90m - $110m revenue with most of the fixed costs already taken for. That size revenue would be a game changer as would the debottling of S.Creek oil that practically double capacity/sales.
Trust as i see it we're buying 3rd party gas so we should be doubling on the purchase price i would think given what Save sells the Uquo gas to Accugas for. I don't think there'll be any valueing 3rd party gas reserves as we don't own them but yep there should be a value given to the sales portion and certainly a good growth market for 3rd party suppliers such as Amocon.
We have 200 mmcf/d processing and rising to 220 mmcf/d with the compression project - maybe a bit more but surely the emphasis is on safety.
The pipeline capacity is up to 600 mmcf/d so around 400 mmcf/d spare depending where the gas goes in.
Zengas - One thing that will be interesting is how the company and market values third party gas reserves for example the gas that goes through our network from Amocon, the company did mention they see a lot of stranded gas assets that can be converted or utilised through our pipeline.
It will be interesting to see the book value of 2p reserves from third party licences or acreage and how they can value this or provide numbers to for example the gas that we get from AMOCON is licence OML 156, I couldn't find 2p reserve number for this licence online, but it would be interesting data point purely because if Amocon have significant reserves and the only way to cash in is through our pipeline than that gas effectively strengthens our 2p numbers albeit not our gas if that makes sense.
Any thoughts on this ?
Noix, They do total that, but the ones over and above the 3 originals are for 'an up to amount' which i don't beleive is fullfilled consistently at that rate. They are also buying in up to 20 mmcf/d gas from Amocon.
"Gas supplied from Amocon does not require processing by Accugas and therefore does not utilise available capacity at the Uquo CPF" = 31/5/23 RNS
Https://www.spglobal.com/commodityinsights/en/ci/research-analysis/petronas-announces-exit-from-south-sudan-noc-evaluates-portfol.html
Old but worth a quick read on Petronas motives for exit
Scotpak - agreed but clearly still plenty of deliberation ongoing still, one would think if Petronas and Savannah have kept it alive till now, neither parties will flake out. So effectively forcing the SS government to take a formal stance on the deal either through an approval or formal rejection.
Maybe the minister wants to ask Petronas on reasons they sold and their thoughts on Savannah as an operator for his peace of mind before approving deal? Might not necessarily be to plead for Petronas to come back. Of course Im gonna be biased as I hold a large SAVE share position.
TrustLie
Thanks for the explanation.
Tier - Sounds to me like they are clinging on to Petronas I wonder if they are trying to convince them to stay. Approvals still seem far away 4 weeks to go don't think we will get it to be fair.
This suggests still no government approval for Save.
#South_Sudan's Trade Minister and Ambassador meet Mark Fitzgerald, Vice President of #Petronas for Intl. Assets, in #Malaysia to discuss the company's activities in 🇸🇸. However, in December 2022, Petronas decided to sell its entire oil and gas business in 🇸🇸 to Savannah Energy.
https://twitter.com/PatrickHeinisc1/status/1762424020379505150
Noix - 200 mmcfd is the amount of treated / processed gas, our total capacity is 600 mmscfd. So that's the difference it depends on whether the customer wants treated gas or untreated where they are happy to process themselves. I would imagine most customers would want treated gas and hence we commenced the cpf capital expenditure
Recovery of Naira is a 3 step process:
1) Mop up excess black market liquidity so speculators and arbitrage trading does not affect naira stability.
2) Increase dollar exports and decrease dollar imports
3) Make oil and gas investment attractive through regulation thus increasing FDI through it's oil and gas sector/
If Nigeria can do all this than I am confident Nigeria can reverse all the devaluation that happened since June 2023.
Although it will need the Nigerian federal government, central bank and oil and gas regulators like minister of petroleum alongside NNPC to work together in this, it's possible but requires openess from all parties and ego's and politics will need to be put aside
Zengas
I've just had a top up of our gas contracts as per the Company website and they total 276 mmscfd.
Whilst accepting that some of these are on a 80% take or pay basis, presumably we have to have sufficient gas at any one time to fulfil any one customer's total requirements ?
Can you please explain to me how this reconciles with the current design capacity of 200 mmscfd.
If Nigeria can increase it's oil exports mainly through oil and with the additional reforms supporting it I can see Naira trading below 1000 against by end of 2024. Any significant refinery surplus which can be exported will bring in US dollars inflow to Nigeria, whilst domestic oil refinery product providing fuel to Nigeria should alleviate dollar import pressure of importing fuel from foreign countries.
Therefore it's highly important for Nigeria to get all it's refinery in full flow this year to export markets whilst also meeting domestic demand.
Some additional significant news on Naira today
https://africa.businessinsider.com/local/markets/nigerias-central-bank-resumes-sale-of-dollars-to-bureau-de-change-operators/z3hdnyd
https://www.bloomberg.com/news/articles/2024-02-27/nigeria-delivers-jumbo-rate-hike-to-aid-its-battered-naira
Trust sorry just seen your question
The 2 trains do 100 mmcf/d ie 200 mmcf/d total design capacity.
One was run at 110-120 on test from memory.
They are both being upgraded to 110 mmcf/d each according to the section in the annual report which gives more detail re pressure etc.
So they should be safely capable of doing 220 mmcf/d instead of the name plate 200 mmcf/d.
I'd need to understand or see the pressure rating explained to fully understand why the increased pressure is needed ?
They can add a modular bolt-on processing train when needed is my understanding so could lift production further when demand/contracts are there.
Dangote Refinery can meet 100% of Nigeria’s demand for refined petroleum products and has a surplus for exports.
The Refinery can also help the naira appreciate against the dollar in a number of ways.
Increased production and export of refined petroleum products can generate foreign exchange earnings for the country, thereby increasing the supply of dollars in the foreign exchange market.
Despite the risks involved in daily operations, the refinery could be a game changer for Nigeria’s economy and currency with proper management and support from the government and stakeholders.
The refinery, which has a capacity of 650,000 barrels per day, is expected to meet 100% of Nigeria’s demand for refined petroleum products and have a surplus for export.
The refinery is also expected to create thousands of jobs, boost fuel supplies across Africa, and generate foreign exchange earnings for Nigeria by exporting 40% of its products.
The refinery is seen as a game-changer for Nigeria’s economy and the downstream petroleum products market in the entire African region.
This is a huge achievement for Nigeria, as it will reduce its dependence on fuel imports and save foreign exchange.
Nigeria’s significant expenditure on fuel imports puts pressure on the demand for foreign currency, particularly the dollar.
By reducing or eliminating the need for fuel imports through the Dangote Refinery’s production, it would reduce the demand for dollars in the importation of fuel. This decreased demand for foreign currency can help strengthen the naira against the dollar.
By exporting excess refined products to other countries, especially in Africa, the refinery will earn foreign exchange for Nigeria and increase its reserves. Increased dollar supply can help stabilize or strengthen the naira, boost the confidence of investors, and strengthen the naira’s value.
As the Dangote Refinery produces more fuel domestically, it would reduce Nigeria’s dependence on imported fuel and conserve foreign exchange reserves.
Higher foreign exchange reserves provide stability and confidence in the currency, which can positively impact the exchange rate. Nigeria’s external reserves are around $35 billion, representing 6 months of imports only.
The opportunity cost of subsidizing petroleum products, which includes loss of export revenue, will be gained thus boosting external reserves.
This decreased dependence on imports can help mitigate the impact of imported inflation, as the prices of locally produced petroleum products would be less influenced by global market dynamics.
Additionally, by eliminating the costs associated with importation, such as shipping, customs duties, and other related expenses, the overall cost of fuel consumption for Nigerians could potentially decrease.
https://nairametrics.com/2023/05/23/how-dangote-refinery-can-strengthen-the-exchange-rate/
Huge news considering Nigeria spends $30b on fuel imports and should greatly improve the dollar liquidity.
Exclusive: Nigeria's new Dangote refinery to export first fuel cargoes
LONDON/BRUSSELS, Feb 15 (Reuters) - Nigeria's Dangote oil refinery has issued tenders to sell two fuel cargoes for export, the first from the newly commissioned refinery, a tender document showed and trading sources with knowledge of the matter told Reuters.
Nigeria has for years relied on expensive imports for nearly all the fuel it consumes but the $20 billion refinery is set to turn it into a net exporter of fuel to other West African countries, in a huge potential shift of power and profit dynamics in the industry.
Dangote declined a Reuters request for comment.
The first cargo is 65,000 metric tons of low-sulphur straight run fuel oil, which Dangote has awarded to Trafigura and is due to load at the end of February, three of the sources said. Trafigura declined to comment.
At least one refiner said they had been offered the cargo by Trafigura without elaborating further.
The second tender is for about 60,000 tons of naphtha loading on Feb. 23-29, a tender document seen by Reuters showed. The deadline for submissions of bids closed on Thursday afternoon, a trader who participated in the tender told Reuters.
Sources told Reuters last week that the refinery was preparing to deliver its first fuel cargoes to the domestic market within weeks.
https://www.reuters.com/business/energy/nigerias-dangote-refinery-export-first-fuel-cargoes-2024-02-14/
There is discontent in every country in the world at the moment rocky, tell me a country where there isn't a political, social, economic or geopolitical crisis.
Whilst I am fully cognisant that that the risk is always heightened in African countries, I would be surprised if it led to a coup in Nigeria the probability is never zero as one would never want to tempt fate but I would still say the probabilities are on the lower end of the spectrum.
A lot of the crisis has been driven by de-valuation of Naira, but that's an active decision that the federal government took short to attract foreign direct investment short term pain for long term gain.
Whatever is going on there is a lot of discontent and anything can happen when this gets out of control in African countries as we have seen all to often over recent times:-
https://www.bbc.co.uk/news/world-africa-68402662
Zengas - On the below does the below mean we had 200 mmcf/d as processed export capacity prior to the CPF so with the CPF facility we are able to transport processed gas volumes of 400 mmcf/d. Still quite unsure as to the detail behind it
I think the company needs to highlight the benefits of this capital expenditure it terms of what it means for the accugas asset, it's important for the company to highlight the detail as it better informs the market of the potential accugas has as sometimes value can simply be misinterpreted if the company does not make an effort in articulating it's benefits even thought they could be transformational but sometimes can be lost due to the fact that market has not been fully informed of the benefits.
Trust - the compression project was to increase the gas export pressure to a maximum 81 bar and deliver 110 mmcf/d per train (x 2) if i've read it right. A $45m capex project with completion later this year.
Rockyride - it’s fake news…… It’s quite difficult to do a coup in Nigeria given the way its political structure and constitution is set up. I would put the chance of it happen below 1%
https://x.com/hqnigerianarmy/status/1761839691312119986?s=46&t=bdVeLrGB139mDog1SFRNlw
Scroll down to the Nigerian coup article
TY Z - Would be great to see after all the years, having drilled 5 from 5. With everything going on in the company we will get good news at some point but after the Coup in Niger, I was not expecting this to come home to please us TY. With very little if anything priced in ATM for Niger, it would be great to see your minimum as per examples above but around 7p on to the SP. With the Nigeria compression project due to complete within the next 4 months, getting closer to ICC decisions, SS hopefully with AD sometime in the next 5 weeks, renewables as another possible hydrocarbon acquisition we have a lot to play for. I have a few tasty questions outstanding with IR but they have been a bit thin on the ground over recent times due to sick absences. I wont even mention the DRF deal which we all so eagerly await.