RE: Repsol Discovery16 Aug 2021 11:58
Cluelesstim is asking questions about the gas pricing. The details of this were set out last June in a 2019 final results RNS:
Engineering and Gas Marketing
The Development Feasibility Study conducted in mid-2019 demonstrated the viability of the project and made it clear that a compelling opportunity exists to grow a Moroccan gas business with the prospect of near-term cashflow from a high value gas development in a stable, growing economy with fast growing energy demand and attractive gas prices and fiscal terms.
The Anchois Field reservoirs have a productive capacity which is potentially sufficient to fully supply individual power stations, with any surplus gas being contracted to domestic industrial users or export off-takers. The fast track base case development option we are focusing on is a low cost subsea-to-shore model with two subsea wells tied into a subsea manifold, from which a 40km flowline and umbilical connect to an onshore Central Processing Facility ("CPF"). This would deliver a plateau production rate of 53 mmscf/d, representing 60% of the 2C resource potential of the A and B sands only, delivering approximately US$150million per year in revenue under a US$8/mcf gas price assumption. This concept allows for future wells to be tied-in to the core infrastructure in phases and open capacity to ramp-up production in response to progressive demand and favourable project economics. Preliminary feasibility study costs range from -30% to +50% of the base case, based on the American Association of Cost Engineers ("AACE") International Class 4 feasibility study standards and we will be working to reduce uncertainty in this range as Pre-FEED studies proceed.
The Gas Market Analysis and the Anchois Field Monetisation Assessment conducted by a third-party consultancy highlighted the strong fundamentals that underpin this market. Moroccan energy demand has doubled since the year 2000 and is forecast to double again between 2015 and 2030. Power generation is principally from imported coal, fuel oil and gas and the majority of growth in recent times has come from renewables and imported gas from Algeria. There is therefore a potential for power generation from indigenous gas, as a transition from fuel oil and coal, to mitigate the carbon footprint of the country's energy consumption and improve its ESG credentials. This project would serve the need to both diversify and focus on security of supply by accessing a low-cost, strategically important domestic energy base whilst minimising environmental impact. Importantly, prices of c.US$8/mcf are expected to the power sector, an assessment also supported by a recently announced peer group gas sales agreement. Sales to industrial users would be expected to be smaller volume, higher margin in nature at around US$11/mcf offering material upside.
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