Eq Guinea Signs MoU with Burkina Faso
Equatorial Guinea’s ministry of mines and hydrocarbons announced September 17 the signature of a memo of understanding (MoU) with the Burkina Faso government for the supply of LNG to that landlocked West African country, development of related infrastructure, and upstream investment.
The agreement was signed September 14. According to the Equatoguinean side, “the initial three-year agreement compels both sides to negotiate and sign an LNG sales and purchase agreement (SPA) and a terminal use agreement (TUA) that will be the basis for their first LNG exchange. The MoU also calls for Equatorial Guinea to explore and produce oil and gas in Burkina Faso.”
Equatorial Guinea has state firms such as GEPetrol and Sonagas which engage in the country's, predominantly foreign-operated, energy businesses.
Equatoguinean minister Gabriel Mbaga Obiang Lima said: “This collaboration with Burkina Faso, part of our LNG 2 Africa initiative, highlights the important responsibility of African countries to cooperate in the energy sector and build the necessary infrastructure to strengthen our economies.” Under the MoU, both sides will commission a technical study for construction of regasification and LNG storage terminals and will exchange knowledge and data. They will also work to build regasification and storage terminals in Burkina Faso and transport infrastructure, either by pipeline or LNG carrier.
The Marathon-operated Equatorial Guinea onshore LNG plant (EGLNG) has nameplate capacity to export 3.4 million metric tons/yr, which currently is contracted to Shell. In addition, developers Ophir and OneLNG plan this year to take final investment decision on the 2.2mn mt/yr Fortuna floating liquefaction (FLNG) which is targeting start up in 2020 and would be Africa’s second FLNG project (after Cameroon LNG due to start up later this year) and the continent first deepwater FLNG one. Fortuna’s offtake is contracted to trader Gunvor.
In May, Equatorial Guinea entered into a binding agreement with the OneLNG joint venture to explore the liquefaction and commercialization of natural gas in offshore blocks O and I, effectively a plan to develop the country’s 2nd FLNG venture. “Bringing online new LNG volumes will enable Equatorial Guinea to sell gas to higher priced markets in Africa and beyond while retaining a share in profits for onward marketing,” said the ministry -- which recently also signed an LNG supply MoU with Ghana.
Only 17% of Burkina Faso’s population in 2013 had access to electricity, while the country’s natural gas production and consumption was zero, according to the latest CIA World Factbook.
Burkina Faso is to the north of Cote d'Ivoire and Ghana, which are planning LNG import terminals, as well as Togo and Benin (Map credit: CIA World Factbook)
Mark Smedley