The development prospects for two multi-billion dollar deepwater LNG projects off the east and west coasts of Africa has seen one receive a substantially bigger boost than the other after the drilling of two key appraisal wells.

Operator BG and its partners Ophir Energy and Pavilion Energy are already making impressive progress with their plans for a deepwater hub offshore southern Tanzania, with good results from their recently completed second drill-stem test (DST) on the Mzia discovery in Block 1 adding further momentum for a likely—but challenging—100 km subsea-to-shore solution to feed two onshore LNG trains.

Offshore FEED work will kick off in 2015 and go on into 2016, based on a subsea wells cluster approach tied back to shore, although a floating production facility has not been completely ruled out yet at this relatively early stage, DI understands. Consultants Genesis Oil & Gas were earlier this year awarded the upstream concept select study by BG. The workscope of that study included considering the upstream facilities required to develop the gas discoveries via an onshore LNG plant. Genesis’ workscope also includes concept selection and pre-FEED activities. That work is also likely to consider options for subsea compression and boosting, DI understands.

The impressive DST on the Mzia-3 appraisal well, drilled in approximately 1,800 m (5,906 ft) of water around 6 km north of the original Mzia-1 discovery, saw it sustain gas production at a maximum flow rate of 101 MMcf/d (equivalent to approximately 17,000 boe/d), with an average controlled rate of 90?MMcf/d.

These flowrates will be good news for the substantial upstream development costs, which will be reduced somewhat by the reservoir’s good quality of deliverability, essentially meaning less wells will need to be drilled, thus reducing the overall cost of drilling expensive deepwater development wells.

The Tanzanian results are a welcome boost for partner Ophir, which also revealed that the news was not so good (although not disastrous) on its latest appraisal off the continent’s west coast. Its latest appraisal well offshore Equatorial Guinea targeting more gas for its planned Floating LNG development there was a relative disappointment.

The company’s Tonel North-1 well in Block R was completed, encountering gas pay combined in the lower target sands but with the upper sands appearing to be low gas-saturation. Analysis of the well data is ongoing, it says.

Ophir states that the result is expected to “marginally reduce” the discovered volumes in the Tonel field but will not impact the commerciality of the base case 2.5 MMtpa FLNG project itself, which has been on the drawing board for some time (see DI, 24 February 2014, page 1). The well was drilled approximately 5km north-east of the original Tonel-1 discovery.

Back on the east coast, Ophir and BG have of course achieved an outstanding exploration performance – they are currently 14 out of 14 for successful exploration and appraisal wells drilled. On Mzia, a test last year on Mzia-2 (the first done on a Cretaceous discovery in deepwater offshore Tanzania) flowed at an equipment-constrained rate of 57?MMcf/d (circa 9,500 boe/d), so the results of the latest DST have virtually doubled that flowrate.

Ophir says the flowrate was “slightly ahead of expectations”. The data acquired from the DST and cores from the Mzia-3ST1 well will be incorporated into planning of the production wells for the field development.

Sami Iskander, BG Group’s COO, said: “The excellent results from this latest drill-stem test further reduce reservoir risk, a critical factor as we progress design of the upstream production facilities and infrastructure. Also, the Mzia-3 DST, along with previous appraisal activities, supports our efforts to optimise the value of a development across our Block 1 discoveries.”

Mzia, discovered in 2012, has a gross gas column in excess of 300 m (984 ft). BG estimates the Mzia and nearby Jodari discoveries in the block hold around 9 Tcf of total gross recoverable resources, with around 15 Tcf of total gross recoverable resources (around 2.5 Bboe), across Blocks 1, 3 and 4. If the volumes from the Taachui discovery made earlier this year in Block 1 are also included, that discovered resource rises to nearly 17 Tcf, according to Ophir.

The Deepsea Metro-1 drillship will now move north to complete the exploration and appraisal programme on the Block 4 discoveries by drilling the Kamba-1 well, which will also target the shallower Pweza North structure. Kamba lies in a water depth of 1,350 m (4,429 ft). If successful, Block 4’s volumes would approach 6 Tcf, confirming enough resource potential to support a third LNG train.

BG has a 60% interest in blocks 1, 3 and 4 as operator, with Ophir holding 20% and Pavilion 20%. The first phase of development remains based around two 5mtpa LNG trains to receive gas from the three blocks, with additional trains likely in later phases. A preferred LNG site has been presented for approval to the Tanzanian Government, and an integrated project team has been set up with the Block 2 partners Statoil and ExxonMobil to progress a joint facility.

Ophir estimates that up to 50 Tcf of upside remains in the prospect inventory, although the majority is in higher risk new plays. Lower risk incremental upside remains in Blocks 1 and 4, it adds, and are also potentially enough to push volumes above the required threshold for the third LNG train.

Back off Equatorial Guinea, Ophir also reports that the Vantage Titanium Explorer drillship has now moved to complete the Silenus East-1 exploration well, targeting a 420 Bcf gas prospect. The well will be deepened to test a secondary, high-impact but high-risk oil target that on current mapping could be a potentially extensive play across the block, says Ophir.

The top hole of Silenus has already previously been drilled, with the well therefore expected to complete within two weeks. There are several analogous shallow gas prospects to Silenus East in the Thrust Belt play sharing the same Direct Hydrocarbon Indicators. If successful, the well would derisk circa 1.2 Tcf of upside (including the Silenus East volumes) in the immediate area, which would provide an additional production source for the proposed FLNG development.

Regarding both projects, Ophir’s CEO Nick Cooper commented: “The Mzia-3 flow-test is another positive result on what will be a core asset in our Tanzanian LNG development. Momentum continues to build on that project with pre-FEED contracts awarded on both the Midstream and Upstream portions of the development.

“The Tonel North-1 result has slightly reduced the size of the Tonel field but this remains a commercial asset within the overall 2.5 MMtpa FLNG project. The project still has the potential to be expanded to 3 MMtpa once the current 3-well programme has completed and results analysed. We are now completing the Silenus East-1 exploration well, with results expected imminently.”

Ophir holds an 80% interest in Block R, which covers 2,450 sq km in water depths ranging from 600-1,950 m (1,969-6,398 ft). Part of its plan includes inviting potential farm-in partners to progress the LNG development during the fourth quarter of this year.

The base case for the FLNG facility revolves around a minimum 2.5mtpa FLNG train at 400 MMcf/d, with the first phase expected to feature seven production wells with first gas to flow before the end of 2018.

Ophir signed a Letter of Intent with Petrofac earlier this year to act as the development operator up to the Final Investment Decision, with a shortlist of leased FLNG vessel providers drawn up earlier this year and a Memorandum of Understanding (MoU) with the preferred FLNG vessel provider expected to be signed by the end of the third quarter of this year. Those in the running for the MoU include the Bumi Armada-Keppel-IHI consortium, up against others including Excelerate and Samsung Heavy Industries, DI hears.

The FLNG FEED and Integrated FEED will get underway later this year or during the early part of 2015.

Initial costs pre-first gas have previously been estimated by Ophir at between US $1-1.5 billion. It chose FLNG as the fastest route for getting its gas to market, saying recently that it also had a lower cost of production compared to a land-based LNG train, as well as enabling staged upstream capex and an expandable vessel capacity.

Offshore