[Premium] Kosmos Discloses Jubilee Gas Price
Kosmos CEO Andrew Inglis has disclosed the price for gas sales, negotiated under the Greater Jubilee Full Field Development Plan (GJFFDP) with the Ghanaian government.
This is the price which partners in the Jubilee field (operator Tullow 35.48%, Kosmos and Anadarko each 24.08%, Ghana state GNPC 13.64% and South African state PetroSA 2.73%) will be paid, once the 'foundation' volume of 200bn ft3 associated gas from Jubilee has been supplied free of charge to the government by partners. That new price was not disclosed in Kosmos' 3Q results earlier on November 6, nor had it yet been by operator Tullow and other partners.
However Inglis said, during a conference call to analysts later on November 6, that the price to be paid for Jubilee gas under the GJFFDP will be $2.35 per million Btu.
Inglis also said that partners in the TEN and Jubilee fields offshore Ghana are looking to bring in a 2nd drillrig during 2018 in order to accelerate exploration drilling on both.
Inglis said a gas sales agreement relating to the TEN fields (both for associated, and non-associated gas) was already agreed -- he did not disclose it November 6 -- but needs to be finalised [presumably with the government]. Once it was finalised, gas sales from TEN will be possible, he added - in response to a question of whether TEN gas would flow only in 2018, or already later this year.
The Jubilee price is relatively low, compared to the $7/mn Btu price that Eni and Vitol were previously reported to be paid once their OCTP gas flows starting in 2018, but it's possible that Eni/Vitol are developing more onshore gas infrastructure as part of their development agreement.
Separately the Kosmos CEO said that presidents in Mauritania and Senegal are looking to a final investment decision by end-2018 on the Tortue floating LNG project, with a view to the BP-Kosmos partnership producing first LNG in 2021.
Update November 7: The $2.35/mn Btu will be paid after foundation volume is delivered and it will take a few years to get there, a spokesman for Kosmos tells NGW. Through June 30, 2017, Jubilee gas deliveries were only one-third of the way through the 200bn ft3 foundation volume, he added.
It's understood that associated gas at Jubilee is not needed to make that project economic, whereas the Eni-led OCTP oil and gas project is more dependent on gas monetisation.
Mark Smedley