Equatorial Guinea Signs Deals to Boost Alen Unit Gas Production
(Bloomberg) -- Equatorial Guinea signed agreements to develop natural gas from offshore blocks operated by Noble Energy Inc., which will feed the Punta Europa liquefied natural gas plant in an effort to boost exports of the fuel.
The Alen Unit joint venture project, located in Blocks O and I, will install a 70-kilometer (44-mile) pipeline from its platform to the LNG plant, operated by Marathon Oil Corp.
The gas will then be processed for export, the country's Ministry of Mines and Hydrocarbons said Monday in a statement. The pipeline will have a capacity of about 950 million cubic feet a day, with first gas expected in the first quarter of 2021.
The agreements state that Alen Unit gas will transit through Alba Plant LLC's liquefied petroleum gas processing plant and EG LNG's production facility, both of which are located in Punta Europa. State-owned Sociedad Nacional de Gas will increase its stake in the project from 25 percent to 30 percent, while Marathon Oil will retain the majority stake.
Equatorial Guinea's economy largely depends on its oil and gas industry, which has seen a sustained decline in production. Oil alone has dropped to less than a third of its peak output of 380,000 barrels a day in 2005, according to the U.S. Energy Information Administration. The ministry has been on a campaign to increase activity in the sector.
Exporting gas from the blocks could deliver $1.5 billion-$2 billion in additional revenue for the country over the life of the project, the energy ministry said. The country was in talks with international companies to invest in its oil sector, a government official who requested anonymity said in November. The official said Equatorial Guinea expects international oil companies to spend about $2.4 billion on the nation's oil and gas industry by the end of 2019.
To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Helen Robertson, Amanda Jordan
©2019 Bloomberg L.P.
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