Macro

Niger Oil Shipment to France Begins After Benin Terminal Opens, 110,000 BPD Expected

Niger resumes oil exports to France via 1,200-mile pipeline, aiming to repay $400 million CNPC loan.

By Mackenzie Crow

5/22, 21:29 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
article-main-img

Key Takeaway

  • Niger's first oil shipment to France, facilitated by China National Petroleum Corp., resolves a regional export impasse.
  • The 1,200-mile pipeline from Niger to Benin's terminal is part of China's multi-billion dollar investment, expected to ship 110,000 barrels/day.
  • CNPC holds a 57% stake in the project; Niger government and Taiwan’s CPC hold 25% and 18%, respectively.

Niger Oil Shipment Resumes

A significant shipment of oil from Niger is en route to France after China intervened to resolve a regional dispute that had halted exports. The first shipment under a deal with China National Petroleum Corp. (CNPC) was delayed due to a week-long impasse over border closures between Niger and Benin. This shipment will help Niger repay a $400 million loan from CNPC. The Suezmax tanker Front Cascade loaded at the terminal offshore Cotonou and departed over the weekend, heading for Lavera near Marseille.

Niger exports oil to Benin via a 1,200-mile pipeline to the Agadem Complex, operated by CNPC. This pipeline, part of a multi-billion dollar investment by China in Niger’s oil industry, is expected to transport 110,000 barrels per day once fully operational. Niger’s Meleck crude oil, a medium-heavy sweet grade similar to Angola’s Dalia oil, could fill three Suezmax tankers monthly at full capacity. CNPC holds a 57% interest in the production, while the Niger government and Taiwan’s CPC hold 25% and 18%, respectively.

Oil Prices Under Pressure

Oil prices extended their decline, closing at the lowest level in three months due to concerns that the Federal Reserve may maintain higher interest rates for longer, potentially dampening energy demand. Brent crude fell for the fourth consecutive session, nearing $81 per barrel, while West Texas Intermediate (WTI) dropped close to $77. The Fed's minutes from a recent meeting indicated a hawkish stance, adding to the bearish sentiment in the oil market, which is already showing signs of weakness ahead of an OPEC+ meeting.

Despite supply cuts from the producer group, oil prices have eased since mid-April. U.S. crude stockpiles increased last week, with inventories at the Cushing, Oklahoma storage hub reaching their highest level since July. "Oil is overall in a bearish momentum," said Gao Mingyu, chief energy analyst at SDIC Essence Futures Co. The focus remains on whether OPEC+ will extend voluntary production cuts at their June 1 meeting. Russia, an alliance member, exceeded its production commitment in April and has pledged to compensate for the extra supply.

Angola's Deepwater Oil Project

TotalEnergies SE and its partners have approved a $6 billion deepwater oil project off the coast of Angola, reaffirming the French energy giant’s commitment to the African nation. The Kaminho project involves converting a very large crude carrier into a floating production, storage, and offloading (FPSO) vessel, with plans to start pumping oil from 2028. The project aims to produce 70,000 barrels of oil per day at its peak from the Cameia and Golfinho fields in Block 20/11.

TotalEnergies CEO Patrick Pouyanne stated that Kaminho will become the company’s seventh FPSO in Angola and the first development in the Kwanza basin. Angola, once Africa’s largest oil producer, has seen its output decline over the past decade due to insufficient investment in aging fields. The Kaminho project is expected to help stabilize Angola’s crude output above 1 million barrels per day. TotalEnergies holds a 40% interest in the project, with Malaysia’s Petroliam Nasional Bhd. and Angola’s Sonangol owning 40% and 20%, respectively. Italian engineering firm Saipem SpA has been awarded $3.7 billion in contracts for the FPSO and subsea equipment.