Further delay likely for Etinde FID
A final investment decision (FID) on developing the Etinde gas block in the shallow waters off Cameroon is "likely to slip into 2022," one of its developers Bowleven said on March 30.
Etinde contains the IM gas and condensate field. Development will involve a wellhead platform tied to an onshore gas processing and storage facility. The project's gas will be primarily used for gas thermal power generation in Cameroon.
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Operator New Age (African Global Energy) and partners Bowleven and Lukoil had hoped to take an FID in 2020 but delayed the move. At the start of this year, the group was still expecting to sanction the project in 2021.
"Ongoing market volatility caused by the Covid-19 global pandemic in 2020, and the associated fall in global oil prices, has continued to slow down and impact negatively on progressing Etinde development overall," Bowleven said in a stock filing this week. "This has particularly impacted various commercial and legal/regulatory approval negotiation processes. As a result, FID is likely to slip into 2022."
TechnipFMC completed a front-end engineering design (FEED) study for Etinde in January, and the developers hope to have a detailed, costed development plan ready to take an FID before the end of the first quarter of 2022. While progress was made at Etinde in 2020, challenging remain, Bowleven CEO Eli Chahin said.
"Certain hurdles persist, predominantly around agreeing the many commercial aspects of the development with Societe Nationale des Hydrocarbures (SNH), the government of Cameroon and other interested parties," he said. "The principal outstanding requirements to achieving FID are now almost entirely commercial and regulatory approvals relating to the development concept we will propose."
Chahin said costs could be improved upon, and that the base case development concept set out in TechnipFMC's FEED study presented lower economic value than the developers desire.
"The JV partners are confident that further discussions with the government of Cameroon, represented by SNH, can progress to a stage whereby a development concept with significantly increased economics for all parties can be agreed upon," he said.