Equaguinea Plans Bigger Gas Market

Equatorial Guinea plans to build a natural gas hub that links production and offshore processing to existing onshore demand. The project is led by the ministry of mines and hydrocarbons in collaboration with oil and gas companies, it said May 10.

The first phase of the project is to implement a new gas supply agreement signed between the ministry and Noble Energy, operator of the Aseng and Alen fields in Block I/O, announced earlier in the day. Gas will be supplied to the Punta Europa gas complex, which includes the Malabo power station, AMPCO methanol plant and Equatorial Guinea LNG plant. The agreement, combined with new subsea pipelines linking the Aseng, Alen and Alba fields, will replace some of the gas production lost as the Alba field declines.

Building on the new Punta Europa-Alba-Alen link, the gas megahub will link into other existing and future gas projects and maximise the gas infrastructure of Equatorial Guinea and potentially that of neighbouring states. This will reduce dependency on single upstream developments for industrial development, and will allow gas to be directed to where the value is greatest.

The state stands to receive over $2bn in revenues. A key component of this will be local content, ensuring that Equatorial Guinea’s local companies are part of the value chain, it said.

Minister Gabriel Mbaga Obiang Lima said: “Equatorial Guinea is developing the leading natural gas economy in sub-Saharan Africa and leading the region in proving new technologies and concepts. This gas megahub project is totally unique in Africa and it requires an unprecedented level of co-operation between government and energy companies.”

The existing gas market will promote further exploration for gas; an increasing role for Punta Europa as the primary user and onshore base for new gas projects; and develop discoveries as tie-ins to the megahub, rather than as standalone upstream developments. These could possibly include the Ophir Energy discoveries which have been described as low-cost gas and earmarked for liquefaction and export, but for which financing remains unannounced.