Equatorial Guinea Finds Partner in Vitol
Equatorial Guinea’s ministry of mines and hydrocarbons has signed a strategic partnership and co-operation agreement with Swiss trader Vitol for the development of a gas hub offshore, it said in a statement November 26.
The so-called Gas Megahub project will collect gas produced from several fields into one spot for liquefaction or for domestic use, although the statement did not explain Vitol's role: whether it would bring finance expertise, or act as offtaker or marketer, for example. “Gas has a critical role to play as the energy mix evolves and Equatorial Guinea is well placed to become a key regional hub. We are delighted to be a part of this exciting initiative,” said Vitol CEO Russell Hardy.
The statement said the aim was "a modern, flexible gas processing and export system that will service the needs of growing gas demands in the region and the global LNG market. This will allow Equatorial Guinea to optimise the value of its gas production across LNG, liquid petroleum gas, condensate and other products, as well as providing other regional producers with access to modern infrastructure and economies of scale.
“It was very important to partner with companies that share the vision of the Gas Megahub like Vitol. We are now under the implementation phase and interested parties should be ready to invest or move aside,” said minister Gabriel Mbaga Obiang Lima.
The statement also made no mention of whether the ex-Fortuna LNG block had been awarded again, although Obiang Lima told NGW in September that the ministry had received bids for it and was hoping to announce a winner in the autumn. The original operator Ophir had drilled three successful wells, of which two produced gas and one, oil but it was forced to relinquish the licence when it missed deadlines for taking a final investment decision. It could not arrange project financing, so the country might be looking for an international oil company with more financial strength and experience.
North of Bioko Island and close to countries such as Cameroon and Nigeria, the Gas Megahub project facilitates a cross-border link with gas projects in those countries and opens the door for establishing new hubs to service the region. The Gas Megahub reduces dependency on single upstream producers for industrial development and combined with new subsea pipelines linking the country’s Aseng, Alen and Alba fields, the project will allow gas to be re-directed to maximise efficiencies. Using the Punta Europa-Alba-Alen infrastructure, the Gas Megahub will be able to connect to new gas discoveries, drive monetisation of stranded gas, increase fuel exports and boost revenue, the statement said.
Obiang Lima told NGW in September that he was not pleased with Marathon, the operator of the Alba gas field, as it had not been investing as much as he had hoped in the offshore hydrocarbons production. The country's existing LNG plant. which delivered its first cargo in 2007, needs backfilling with production from new fields. All its gas now comes from Alba.