Equatorial Guinea and Major Oil and Gas Companies Sign Definitive Agreements for Monetization of Gas from the Alen Unit
- The Ministry of Mines and Hydrocarbons of Equatorial Guinea, has executed Definitive Agreements with major oil and gas companies monetize to gas from the Alen Unit.
- The Agreements were signed on Monday at the ongoing APPO CAPE VII Congress and Exhibition 2019, in Malabo, Equatorial Guinea (EG)
- The Definitive Agreements have increased Sonagas’ stake in the EG LNG Plant by five percent
Malabo, 1 April, 2019 – The Ministry of Mines and Hydrocarbons, on behalf of the Government of the Republic of Equatorial Guinea (EG), has executed Definitive Agreements with the Alen Unit and respective Punta Europa Plant owners to monetize gas from the Alen Unit, located in Blocks O and I offshore Equatorial Guinea (EG) and operated by Noble Energy EG Ltd.
The Definitive Agreements, which were signed at the ongoing APPO CAPE VII Congress and Exhibition 2019, in Malabo, Equatorial Guinea, on Monday, commit for tolling Alen Unit gas through Alba Plant LLC’s liquefied petroleum gas (LPG) processing plant and EG LNG’s liquefied natural gas (LNG) production facility, both located in the Punta Europa LNG terminal. Marathon Oil is the majority shareholder in both Alba Plant LLC and EG LNG. This agreement will see EG’s national gas company, Sonagas GE, increase its stake in the plant from 25 percent to 30 percent.
Existing production and processing facilities are already in place at the Alen Platform and in Punta Europa. The Alen offshore platform will undergo minor modifications to export gas, while primary condensate will continue to be produced and lifted offshore via the Aseng FPSO. The Alen Unit joint venture will install and operate a 70km pipeline to transport gas from the Alen Platform to Punta Europa, where it will be processed and transported for sales in the global market.
The pipeline will be capable of transporting approximately 950 million standard cubic feet of gas per day, with first gas expected in the first quarter of 2021. The Alen Unit gas monetization project will leverage the capacity of the world class Punta Europa facilities. Modifications are already underway at Alba to receive Alen Unit gas. No process modifications are expected at EG LNG to process Alen Unit gas.
The project will provide an additional source of gas for the Punta Europa facilities and will transform the Alen platform into an offshore gas hub for development of both Alen Unit gas, other Block O and I discoveries, and, potentially, additional Gulf of Guinea gas fields. The Alen Gas offshore hub will be the first hub in the Government’s vision of developing Equatorial Guinea as a gas mega hub, comprising of additional offshore gas hubs, all feeding gas into the Punta Europa facilities.
“This is the kick off of our gas mega hub and we will do more deals on other gas assets in the country that must be developed. Development of the gas mega hub will ensure a thriving Equatorial Guinea gas industry into the future. It is my firm belief that it will create opportunities for development of our citizens in the upstream and downstream segments of the country’s oil and natural gas industry,” said Minister of Mines and Hydrocarbons, H.E. Gabriel Mbaga Obiang Lima.
He added that the monetization of Alen Unit gas could deliver between $1.5 to $2 billion dollars in additional state revenue over the life of the project, including revenue from Alen Unit and respective Punta Europa plants.
“Local content will play an integral role in the implementation of the project when it comes to contracting and jobs for our citizens. I am happy this project will support the employment of Equatoguineans employed by the Punta Europa plants and Alen platform, which currently stands at approximately 1,400 employees in total,” the Minister noted.
The Alen Unit is comprised of the Block O and Block I contractor groups. The members of the Block O contractor group are Noble Energy, which serves as the technical operator, Glencore Exploration Limited and Compañía Nacional de Petróleos de Guinea Ecuatorial (GEPetrol). The members of the Block I contractor group are Noble Energy, which serves as the technical operator, Glencore Exploration (EG) Limited, Atlas-Oranto Petroleum International Limited, Gunvor Resources Limited, and GEPetrol.
The Punta Europa parties include Alba Plant LLC, Alba Unit and Equatorial Guinea LNG Train 1, S.A. (EGLNG). The shareholders in Alba Plant LLC include Marathon Oil, Samedan of North Africa, LLC (a subsidiary of Noble Energy Inc.) Sonagas. The shareholders of EG LNG’s holding company comprise Marathon Oil, Sonagas, Mitsui & Co. Ltd. and Marubeni Gas Development UK Limited.