Oil and gas in Kenya needs security
As the economic fallout from the recent terrorist attack on Kenya’s Westgate Mall by Somali militants is still unfolding, the country’s petroleum industry will have to focus its attention toward security in order to keep its momentum, says an analyst with research and consulting firm GlobalData.
John McCormack, GlobalData's lead analyst covering Sub Saharan Africa, believes that while the Somali extremist group Al-Shabaab has not made a specific threat, Kenya’s petroleum industry is of strategic importance to the country’s economic future and is itself a feasible target for future attacks.
“Although the attack on the Westgate Mall is likely to have a minimal impact on the overall pace of Kenya’s oil and gas operations, most international oil companies (IOCs) will have to invest in security, especially with the relocation of high numbers of expatriates to Kenya. Additionally, there will also be a heightened risk of damage to oil and gas infrastructure, such as pipelines. These are particularly difficult to secure from Somali militants,” McCormack says.
GlobalData forecasts the first oil production in Kenya to be achieved in 2016, from blocks 10BB/13T, once oil and gas legislative measures and infrastructure have been put in place. The Kenyan government is expected to receive revenues of $300 million per year from oil produced from these blocks alone over the next 30 years.
According to McCormack, Kenya doesn’t have a safety and security master plan in place to protect its oil and gas infrastructure. However, Kenya Petroleum Refinery Company (KPRC) did tighten security around its Mombasa refinery facility, the only one in East Africa, following the attack.
Additionally, both security personnel and unarmed security guards are deployed at all onshore and offshore blocks where exploration operations are ongoing.
Furthermore, drilling rigs, especially those located close to the border of Kenya and Somalia in the Mandera, Anza and Lamu basins, are now on alert for militants after the Kenyan government showed no willingness to accede to the demands of Al-Shabaab.
“The Kenyan government may lose some of its contract negotiating powers with the IOCs as a result of the deteriorating security conditions in the country. However, although the Westgate Mall attack will cause investors to consider the future ramifications of terrorism in Kenya, the opportunity-cost of turning down investment in the country is likely too high to justify not pushing forward,” McCormack says.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.