Angola LNG output at 20 pct capacity, full run end-2014-Sonangol

Reuters

* $10 billion project has suffered upstream delays

* Rig disaster in July delays supply from Chevron blocks

* Sonangol says linking more blocks to supply plant

* Full maintenance shutdown still not in effect

By Shrikesh Laxmidas

LUANDA, Oct 29 (Reuters) - Angola LNG's output will fallshort of design capacity through 2014 after upstream problemsincluding a rig disaster forced it to bring forward new suppliesfrom other blocks, a senior executive at state oil companySonangol said on Tuesday.

The $10 billion project is operated by U.S. oil majorChevron with a 36.4 percent shareholding, while Sonangolhas a 22.8 percent stake. Other stakeholders include Total, BP and ENI.

"We started producing this year but we still have notreached maximum production capacity at Angola LNG, we are ataround 20 percent," Paulo Fernandes, an executive at Sonangol'sproduction department told an industry conference in Luanda.

After delays of 18 months caused by technical problems, the5.2 million tonnes per annum project made its first exportshipment in June and has since shipped another four cargoes.

But a rig disaster in July that caused one death alsodelayed efforts to link two offshore blocks with the plant,slowing its drive to bring production to full capacity.

The plant's peak production capacity can be achieved only ifit receives 1 billion cubic feet of gas daily from the fiveoffshore blocks mandated to supply the facility.

Asked if it could be producing at full capacity by end-2014,Fernandes said: "Yes, probably. We had some problems at theplant's launch stage, but these were resolved and now we're inthe phase of commissioning and will progressively get the 100percent goal."

RIG DISASTER DELAYS SUPPLY

A string of upstream setbacks has significantly dimmed theprospect of realising production goals next year.

On July 1, the drilling rig Perro Negro 6 operated byItalian oil services group Saipem capsized as it waslaying a pipeline linking Chevron's Block 0 and 14 with theliquefaction plant.

"The accident was at a platform that was going to make thetransport links from one of the operators," Fernandes said.

The blocks, which were to be tied to the plant next year,were due to supply up to 170 million cubic feet of gas per dayinitially to the plant.

"It will delay the delivery of gas from one of theoperators, but it won't compromise the Angola LNG projectentirely as we have other projects for links," Fernandes said.

Fernandes said Total's Block 17 is the main supplier to theLNG plant, adding BP's Block 31 is now also supplying some ofthe gas due to a loss of delivery from other fields.

Angola is Africa's second biggest oil producer after Nigeriaand plans to launch 15 new blocks next year.

Fernandes said Angola also hoped to tie gas produced fromsome of the blocks into its liquefaction venture.

A 53-day maintenance shutdown for the plant has beenrepeatedly delayed due to the discovery of small gas leaks ononshore pipeline.

The latest information supplied by site workers suggestedthat maintenance was due to start from Sept. 29, but Fernandessaid that a full shutdown had not yet taken place.

"One part of the maintenance has not started yet. We arecontinuing to send gas from block 17 to feed the plant."

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