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Total, Greenville Float Virtual Pipeline to Boost Domestic Gas Supply

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  • Total, Greenville Float Virtual Pipeline to Boost Domestic Gas Supply

Total Exploration and Production Nigeria Limited (TEPNG), and Greenville Oil and Gas Limited have floated an initiative that will process raw gas into domestic Liquefied Natural Gas (LNG) to boost power generation and industrialisation in the country.

The agreement is expected to deliver 74 million standard cubic feet (scf/d) of gas to Greenville $50million Mini-LNG facility in Rumuji in Rivers State.

Speaking at the signing of the Gas Sale and Aggregation Agreement (GSAA) in Abuja, with Greenville, TEPNG, and Gas Aggregation Company Nigeria (GACN), Greenville Chairman, Eddy van den Broeke, said the project would generate 2,000 direct and 5,000 indirect jobs, and revive the textile industry in Kaduna, and Kano axis.

He added: “This project has the capacity to create up to 2,000 direct jobs (and 5,000 indirect jobs). It also provides an avenue for seamless movement of gas to stranded locations across the country. It will reduce greenhouse emissions from gas flaring. It will facilitate the use of gas for power generation. It also has the capacity to revive gas-based industries, large industrial ventures and transportation. The project will significantly contribute towards the displacement of more harmful and expensive fuel sources and conserve much needed foreign exchange. The improved economic activity also increases the Federal Government revenue base, and supports the administration’s revenue diversification agenda.”

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, noted that the $500million Mini-LNG facility apart from ending gas pipeline vandalism, the sales agreement would end disparity between the prices of gas in the southern part of Nigeria and the north, and also revive job creation initiatives.

He said: “I think this is a milestone in our journey at ensuring that gas plays a major role in our industrialisation. Apart from reducing attacks on gas pipeline, this will also ensure that gas price is uniform across the length of this country. There are so many industries that have died as a result of power supply in the northern part of the country. So, this agreement would help us mitigate that.”

On his part, the Managing Director, TEPNG, Nicolas Terraz, said the NNPC|TEPNG would supply 74million scf/d to Greenville from the OML 58 in River state.

He hinted that gas supply to Greenville would commence soon, adding, “it will provide cleaner energy to local industries and reduce emission of greenhouse gases, the by protecting our environment. Undoubtedly, the signing of this agreement is a new demonstration of our support to the Nigerian Government’s objectives to develop local industrial capacities, encourage direct foreign investments, and boost Gross Domestic Product growth in line with the President’s agenda on gas-based industrialisation.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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