Enron entering Africa in Benin

Apr 28, 1998 02:00 AM

Enron is about to make its first foray into the embryonic West African gas market as it has signed a letter of intent with small Canadian Abacan to transport gas from the Calgary company's Aje discovery off Nigeria to a landfall in the Benin Republic.
Under the proposed deal Abacan would sell gas at the wellhead to Enron, which would transport it to shore to a new power generation plant near the capital, Cotonou.
The electricity produced would then be sold to industrial customers, initially in Benin and Togo. However, Enron is also thought to be in negotiations about supplying Aje gas direct to Ghana, supplementing gas from Ghana's South Tano field, and possibly Nigeria in later stages of the project.
First production is provisionally expected in mid-1999 at rates of about 50 mm cfpd of gas as well as 7,000 bpd of liquids. Future flow rates could be as high as 150 mm-200 mm cfpd.
Industry observers, however, suggest that Abacan may have difficulty in meeting this on-stream date since it has yet to secure a drilling rig to fulfil its requirements.

Located in block 309, Aje is said to have proven gas reserves of 291 bn cf in addition to 710 bn cf of probable reserves.
Further gas resources could come from Abacan's undrilled block 310 and also its Seme field off Benin, which holds another 77 bn cf.
The plan is to install a T-piece on the main Aje-Benin trunkline for the future tie-back of Seme.
A source close to the project said the costs for the project would be around $ 100 mm to build the power plant and 60 km offshore pipeline.
Abacan will be responsible for the remaining offshore facilities. It plans to develop Aje by using a small FPSO together with a wellhead platform.
As well as handling the gas, the floater would also process and store the field's liquids.
Consultant Gaffney Cline and Associates is said to have assessed the field's proven plus probable liquid reserves at 150 mm barrels of oil and 75 mm barrels of condensate.

Some $ 20 mm -$ 22 mm is expected to be spent on the platform, risers and re- completing two production wells. The FPSO, one of the few in the world to handle significant quantities of gas, will be leased.
Norway's Fred Olsen is said to be working closely with Abacan on assessing a suitable conversion candidate.
Last year the Norwegian company supplied a converted FPSO for use on Abacan's Ima field off Nigeria. Schlumberger is responsible for operations while SBM provided the Calm buoy.

Source: not available
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