SATISFYING ENERGY NEEDS SATISFYING ENERGY NEEDS WITH NATURAL GAS FROM A WITH NATURAL GAS FROM A SUBREGIONAL PERSPECTIVE: SUBREGIONAL PERSPECTIVE:
THE THE CAMEROON’S CASECAMEROON’S CASE
NOT AN OFFICIAL UNCTAD RECORD
OUTLINEOUTLINE
• Overview of the Petroleum sector in Cameroon– Situation of Cameroon– Current actors– Some statistics: Exploration and Production
• Situation of the Energy Sector in Cameroon• Cameroon’s Natural Gas Sector Overview
– Natural gas resource base– Institutional framework– Natural Gas Master Plan
• Gas Development Opportunities– Local markets– Subregional markets
• Conclusion
SITUATION OF CAMEROON SITUATION OF CAMEROON IN AFRICAIN AFRICA
• Cameroon is situated in the arm-pit of Africa in
the Central African Region
• Population of about 16 million people.
• Surface area of 475000sq.km
• Modest oil producer: 95000bls/day
• No major discovery as yet
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PREVISIONS
PRODUCTION STATISTICSPRODUCTION STATISTICS1977-20081977-2008
SITUATION OF THE ENERGY SITUATION OF THE ENERGY SECTOR IN CAMEROONSECTOR IN CAMEROON
• Population: 16 million people.• Economic growth: 5% • Population growth: 3% • Per capital income: 700 USD • Inflation index: 3%
Location Map
SITUATION OF THE ENERGY SITUATION OF THE ENERGY SECTOR IN SECTOR IN CAMEROONCAMEROON
• Access to conventional energy: less than 10 % of Population
• Main fuels used: Wood & Kerosene (cheapness, affordability and accessibility)
• 675 000 tonnes/year of wood consummed
• Electricity: 90% Hydro and 10% thermal
• Present demand: 500 MW
• Expected to double within 10 years
SITUATION OF THE ENERGY SITUATION OF THE ENERGY SECTOR IN SECTOR IN CAMEROONCAMEROON
• Government Policy today : Diversify energy sources to meet the growth rate
• Priority is focused on gas
Clean energy source
Existence of enough reserves to satisfy local market
Protection of environment
Halt deforestation
• RESOURCE BASE• INSTITUTIONAL FRAMEWORK
-THE PETROLEUM CODE
-THE GAS CODE• THE NATIONAL GAS PLAN• GAS DEVELOPMENT OPPORTUNITIES
NATURAL GAS SECTOR OVERVIEWNATURAL GAS SECTOR OVERVIEW
RESOURCE BASERESOURCE BASE
• Cameroon is underexplored in terms of natural gas
• Total discovered recoverable Non-Associated natural Gas : 5.5 TCF
• Risked upside estimated volumes : 20 TCF
• Current discovered gas by accident from oil exploration
• Discovered gas rich in heavy components and located close to main energy centers in Douala and Limbe
RESOURCE BASERESOURCE BASE
• Reserves are substantial for local market but not sufficient enough for classical export schemes
• Privatisation of the electricity sector and the present economic growth have warranted the promotion of gas-to- electricity projects
• The emergence of subregional markets is an incentive to development of natural gas projects
INSTITUTIONAL FRAMEWORKINSTITUTIONAL FRAMEWORK
• Prior to the promulgation of the Petroleum Code in December 1999, no legal framework for Gas Development
• The Petroleum Code regulates the Upstream sector and provides incentives for gas exploration and development
INCENTIVESINCENTIVES
• Possibility of extension of the exploration period for appraisal of the gas discoveries and the search for market outlets
• Tax holidays for cost recovery for development and exploitation of natural Gas
• No custom duties for gas development and exploitation activities
• Possibility to negociate economically viable terms for Gas development projects
THE GAS CODETHE GAS CODE
• Promulgated to Law on December 30, 2002
• Enabling Act published on September 4, 2003
• Regulates the Downstream sector for gas development projects
• Legal framework condusive to the development of Gas resources
THE GAS CODETHE GAS CODE
• Sets an attractive environment for Private National and Foreign investors in the Gas sector
• Lays down principles governing regulation of the sector
• Guarantee safety of facilities and environmental protection
Gas Regulator• To enforce the provisions of the Gas Code and its
enabling acts; • To ensure the protection of the rights of customers;• To manage the selection process for concessions,
licences and authorizations;• To ensure application of norms, security and
environment protection;• To monitor compliance with competition and play the
role of alternative dispute resolution authority.
THE GAS CODETHE GAS CODE
Incentives
• Tax write-off for ten (10) years
• Guaranteed convertibility of currency
• No Government subsidies
• Off-and on-shore US dollars accounts
• Freedom to transfer funds
• Exemption of custom duties for imported project goods/equipment.
THE GAS CODETHE GAS CODE
• Define an optimum natural gas development from all known reserves both Associated and Non-Associated
• Centralise coordination of natural Gas development
• Get maximum economic benefits through a prudent step by step approach to gas development
• Define a long term national gas development strategy
THE NATIONAL GAS PLANTHE NATIONAL GAS PLAN
Objectives
HUB
Usine de GNLOnshore
Jabane/Ifiari(144)
144
Afaga(128)
151
131
131
76
20
314
Narendi/Idaboto(131)
Edem(32)
Kita(114 Kita Gas 314
Design)Ekundu Nth
(56)
Ekundu Sth(20)
Sanaga Sud(234 Sanaga Sud Gas 260 Design)
Kribi L(88) Kribi B
(76)
Ile de Bioko
Plate-formes puits
Plate-formes production
Débit de gaz en MMSPC/J
Gaz sec
- SONARA- Centrale thermique de Limbé
GPL(50 000 t/an)
Condensats(3 000 bbb/j)
16476
260
36040
Centrale thermique de Kribi
Possible configuration of Gas development infrastructure from known resource base
Creation of gas gathering system
Gas Development opportunities
Gas-to-electricity
• Kribi gas to electricity plant to go operational by the end of 2007
• Capacity of 150 MW and expected to grow to 300 MW
• PSC on Sanaga Sud field signed in March 2006 with Perenco Cameroon
• Gas sales contract to be signed in June 2006 with AES SONEL
Gas Development opportunitiesGas Development opportunities
Conversion of Limbe Power Plant and SONARA refinery to function with natural gas.
HUB
Gaz sec
- SONARA- Centrale thermique de Limbé
GPL(50 000 t/an)
Condensats(3 000 bbb/j)
Gas Development opportunitiesGas Development opportunities
Extraction of LPG for local and
subregional markets
Production of 50 000 tons/year
envisaged
Feasibility study on 4 000 m3
storage capacity at Douala is ongoing
HUB
Gaz sec
- SONARA- Centrale thermique de
Limbé
GPL(50 000 t/an)
Condensats(3 000 bbb/j)
Gas Development opportunitiesGas Development opportunities
Valorisation of liquids extracted from wet gas is envisaged:
about 3 000 barils/day contemplated HUB
Gaz sec
- SONARA- Centrale thermique de
Limbé
GPL(50 000 t/an)
Condensats(3 000 bbb/j)
Gas Export scheme to LNG in Gas Export scheme to LNG in Equatorial GuineaEquatorial Guinea
• Protocol Agreement signed between SNH and SONAGAS on March 20, 2006 to study the implementation of the project
• The terms of the agreement provide for:
Joint study on the Technical, Economical and Legal aspects of the export project
Creation of a Steering Committee and Study groups
Study period: 15 weeks
Conclusion to be submitted to both Governments for ratification
Gas Export scheme to LNG in Equatorial Gas Export scheme to LNG in Equatorial GuineaGuinea
OBJECTIVESOBJECTIVES
• To determine volumes of Cameroon natural gas necessary to meet the needs of the LNG plant in Equatorial Guinea
• To determine gas requirements of the LNG plant in Equatorial Guinea
• To examine the Legislative and Regulatory framework applicable for construction of a pipeline for gas transport from Cameroon to Equatorial Guinea
• To identify financing sources
CONCLUSIONCONCLUSION
• Gas is no more a stranded asset in Cameroon
• Natural Gas exploration and development is now a reality especially considering the underexplored status of its basins
• The new institutional framework has asserted the governments proactiveness to create the conditions for gas development
• International cooperation among countries sharing common boundaries is a major incentive on gas development projects