Chariot Seeks Buyers for Moroccan Gas
UK listed Chariot Oil & Gas is in talks with buyers on both sides of the Straits of Gibraltar to secure a good price for its Anchois gas offshore Morocco, CEO Larry Bottomley told NGW June 18.
The Moroccan Brent crude-indexed gas price of around $8-11/mn Btu is a multiple of the Spanish wholesale price, but the field's first deliveries are a few years away and the Spanish market, now in the doldrums, will possibly be different then, making it a more attractive market. He said it was good if Spanish players knew it was talking to Moroccan buyers – and vice-versa.
Morocco imports 95% of its gas from Algeria and the country is seeing a major growth in energy demand. It has doubled in the last 20 years, which explains the high price paid for domestic gas production, Bottomley said. Future producers will see a different regime when there is an indigenous gas supply system. But so far there is very little happening upstream and gas is a clean alternative to diesel or coal.
Algeria exports gas to Spain and Portugal through the Gazoduc Maghreb Europe (GME) pipeline, operated by Spain's Enagas. Morocco takes either money or gas as payment in kind for transit services and there is capacity in the pipeline for some extra flows westwards, giving it flexibility against its own gas demand and supply fluctuations.
Enagas is also in talks with another producer of Moroccan gas regarding exports to Spain and Chariot is expecting to piggy-back on those discussions, he said.
Possible buyers in the Moroccan market with which Chariot has held talks include the state electricity enterprise ONEE and small-scale liquefaction companies, offering virtual pipelines to consumers, he said. Depending on demand, industrial end-users in either of the two free enterprise zones are also on the radar.
The gas is very high quality, being 97% methane, 2% liquids and 1% pentane or heavier. The liquids would need to be removed, and also some pressure reduction would be required before feeding the gas into the GME. But there are no impurities such as sulphur, carbon dioxide or nitrogen.
The company is still reprocessing old seismic data from 2009, which it acquired with the licence a year ago. With the lockdown still in place, this and other pre-front end engineering and design (Feed) work, such as designing a test well, is all being done at home, but the company is a third of the way through the three-month process and hopes to move to Feed award in September.
It has been in discussions with financiers, lenders, engineering and marketing advisers at every stage including the design of the test well to ensure that the results meet all the specifications needed. "We don't want to have flow data based on too short a duration, for example," he said.
The Spanish company Repsol abandoned the prospect as non-material in 2009, holding only at around 300bn ft³ 2C. However, advances in data analysis capacity show much greater potential at lower depths too. Additional on-block, exploration prospective resource prospect inventory exceeds 1 trillion ft³. There are also satellites requiring separate development that may be brought on stream later that more than double that figure in all.