Energy Central Professional


Cameroon Upstream Gas Production Forecast

Fitch Solutions Sector Intelligence  


    THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

    Cameroon Upstream Gas Production Forecast

    • 20 Sep 2021
    • Cameroon
    • Oil & Gas

    Key View: Cameroon's natural gas sector saw notable progress in 2018 owing to the start-up of the Kribi fields and LNG exports from Golar's Hilli Episeyo floating facility. Etinde will offer additional upside in the mid-2020s, but as with oil, further project developments will be needed to grow this production sustainably.

    Latest Updates
    • Gas production outperformed our expectations in 2020, rising by 2.0% y-o-y, according to data from the Société Nationale des Hydrocarbures (SNH). Data from SNH available to available to April 2021 report a 3.5% y-o-y rise in output.
    • We have adjusted up our production forecast for 2021 from 0.0% to 2.0% to reflect this. We hold to our forecast -1.0% decline in 2022.
    • The only significant greenfield project in the pre-final investment decision (FID) pipeline is the Etinde project. An FID had been targeted for 2020 but was delayed to 2022 due to the impact of the global pandemic.
    • As discussed in the Upstream Oil Production module of this report, we have adjusted our forecast to reflect this and now anticipated first gas from mid-2025. We note meaningful risk of further delay.
    Structural Trends

    Traditionally, Cameroon's natural gas production was associated with oil and was either flared or re-injected. The Logbaba field began marketable production in late 2011, sending out small volumes to industrial users, displacing more costly oil. From 2013, the Sanaga Sud field also began producing, sending deliveries to the 216MW Kribi gas-powered power plant. It wasn't until 2018 that the country's production registered its first major volume growth, as output ramped up at Sanaga Sud & Ebome to feed the Hilli Episeyo floating liquefied natural gas (FLNG) unit.


    Logbaba - which is operated by Victoria Oil & Gas via its subsidiary Gaz du Cameroun (GDC) - produces small volumes of natural gas, which it sells to the domestic power sector and industrial consumers. To supply the gas, GDC has built a 50km pipeline distribution network. In 2019 SNH reported that a total of 41 companies were connected to the network.

    GDC is continuing to look for new customers and has reported strong progress in expanding its industrial base. In a report issued in Q420, the company stated a 12.8% y-o-y increase in thermal and industrial gas consumption over H220, including gas supplied to one new industrial user. However, this was more than offset by the loss of demand from power users after GDC halted supplies to ENEO, which had fallen considerably into arrears on its payments. Given that ENEO was the company's largest offtaker, gross sales fell by 50.6% overall in the same period. We expect that volumes will again trend higher as the company diversifies its buyers, albeit from a low base. While volumes remain small, we expect production to trend higher, as the company diversifies its buyers. GDC noted potential for further production growth in line with future demand.

    Sanaga Sud And Ebome

    Although Sanaga Sud was already in production, its capacity saw a major boost from Perenco's Kribi project, first sanctioned in 2015. Over its 10-year lifetime, the project will see about 14bcm of gas produced and exported via an FLNG. The facility, a converted LNG carrier, has a liquefaction capacity of 2.4mtpa, while the fields have peak plateau production of 1.2mtpa (1.6bcm). They also produce condensates (3,300b/d), which are exported, and LPG (around 800,000b/d), which is used to supply the domestic market.

    The project was attractive from a cost perspective - the development is situated in shallow waters in an area where infrastructure has been present since 2013, when production modules and pipelines were installed for the Sanaga Sud gas and Kribi power projects. In addition, this was the world’s first FLNG conversion from an LNG carrier. The costs were considerably lower when compared with a newbuild vessel, and the project came in USD70mn under budget, according to Golar LNG (which converted the carrier). We expect production from Sanaga Sud and Ebome to remain broadly flat across the forecast period.


    The Etinde project is the only major project in the development pipeline. As discussed in Upstream Oil Production module of this report, several options for monetisation are under consideration. In a March 2021 investor presentation, the company listed three main options: gas reinjection and recycling, to manage fluctuations in domestic demand and maximise condensate recovery; initial low level gas supply to the domestic power sector; and gas exports to maximise condensate recovery. Negotiations with the government are ongoing but have encountered difficulties in reaching agreement over domestic allocations. The project partners have agreed to prioritise the domestic market but have concerns over the size of the demand pool and the ability to monetise this demand. The partners want long-term commercial agreements in place before taking a FID. They have also indicated that exports would be needed to supplement domestic sales. It is as yet unclear how the gas would be exported. Initially, a stand-alone FLNG facility was proposed, although the project economics were always uncertain and higher domestic gas sales render this option less likely. Alternatively, gas could be fed into the Kribi LNG plant or sent to Bioko Island in Equatorial Guinea. However, negotiating cross-border flows could delay the FID, and differences in the quality of the gas would require additional processing (and thus cost) before delivery to Kribi.

    Gas Production Forecast
    Cameroon - Gas Production Forecast (2019-2030)

    e/f = Fitch Solutions estimate/forecast. Source: EIA, Fitch Solutions

    Upside Risks

    North Matanda (VOG 75% And Afex Global 25%)

    The most significant and short-term upside risk to our gas production outlook is from VOG’s North Matanda field. The discovery is located on the company’s Matanda onshore and offshore permit, close to the city of Douala. The North Matanda Field is an extension of the Logbaba structure, and wells drilled alongside extensive 2D and 3D seismic data have shown a strong geological continuation between the two. The existing Logbaba gas network infrastructure would allow for fast-track development of any new discoveries made on Matanda to deliver additional natural gas to local industrial users in Cameroon.

    VOG has been progressing with sub-surface evaluation work, indicating the potential for more than 1tcf of recoverable gas across the onshore sections of the block. In January 2019, the company announced that it had received presidential approval for its participating 75% share in the Matanda Production Sharing Agreement. The company is progressing with appraisal drilling at the Matanda North offshore field, which contains gross estimated 2C recoverable gas resources of 150bcf and 6mn bbl of condensates and upside of 1tcf of gas. Onshore prospects close to the Logbaba pipeline network will be the focus; resources of gross prospective mean gas initially in place are estimated at more than 1.3tcf of gas in 23 prospects and leads.

    North Matanda Field Posing Upside Risk To Gas Production

    Cameroon - Natural Gas Exploration Activity


Copyright © 1996-2022 by CyberTech, Inc. All rights reserved.
Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.