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Location: Gulf of Guinea (Africa)
Type of project: Flare gas capture – LNG liquefaction – regional LNG distribution
Assumed initial capacity: 500.000 metric tons of LNG per year
Estimated CAPEX: USD 500 MM
Estimated investment requirement for development: USD 30 MM
Estimated time from DTP to RFO: 48 months
Alkebulan aims at developing and building as well as operate LNG liquefaction trains with its purification and gas treatment plants, and distribution equipment as well as infrastructure. It will buy Natural Gas feedstock from oil producers that currently flare the gas at nominal cost. Those oil producers will save on the penalty payment they currently must disburse for flaring rights.
Alkebulan LNG aims to set up initial LNG production and distribution infrastructure in the Gulf of Guinea (GOG) in order to provide African countries with LNG as a clean and comparatively cheap primary energy solution for their electricity and utility markets. Electricity in Africa is notoriously erratic which is why such projects receive fast track treatment from local authorities.
After a successful startup, Alkebulan will also deliver LNG to the nascent LNG as a bunker fuel for sea-going vessels in the GOG. Lastly, Alkebulan will help trigger a conversion to LNG as a fuel for heavy vehicles and high horse-powered machines in the region similar to what happens on the North American and the East Asian fuels market today.
Alkebulan will allow its customers to make the switch from costly and dirty residual fuels such as Heavy Fuel Oil (HFO), coal, other solid fuels and distillate fuels such as Diesel and Kerosene to the cleaner and cheaper LNG as a primary energy and fuelling source.
CUSTOMERS, MARKETS & BUSINESS MODEL
Mid-scale LNG production fits well with mid-scale LNG transport. This makes Alkebulan a regional player, not a global one. Initial customers of Alkebulan are utility type regional power producers as well as consumers with generation demands of 50 MW installed capacity or more. Also, Alkebulan strives to be marine bound which makes scouting for production assets and also consumers close to the shore a priority.
Alkebulan will concentrate on power customers exclusively for phase 1 of the project in order to keep the project simple. It will buy the feed gas at a nominal price from the flare owner and sell LNG on a landed basis. Receiving infrastructure will have to be developed in lockstep with the project but will be owned and operated by the buyer of LNG.
TIMELINE, FINANCIAL REQUIREMENTS, AND MILESTONES
This is a pure project concept at its very beginning. Preparatory work has been conducted only to the level that there was a superficial market demand simulation done, marginal field owners in Nigeria and in the Republic of Congo have been identified and a first high-level economic feasibility estimate has also been positive.
The project promoters have spent various trips in the target area scouting for information and building a net of contacts that would allow developing this project “fast track”.
That being said, this is Africa with its heavy dose of drift, slack and some other structures that make work on this continent a challenge.
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