Equatorial Guinea is positioning itself as a hub for gas in the Gulf of Guinea and hopes to deliver where others have failed: developing the first successful cross-border gas venture on the continent
Gas is a major priority for Equatorial Guinea and its neighbours. While Cameroon brought on stream Africa’s first Floating LNG project in 2018, Nigeria has declared 2020 the Year of Gas and both countries continue to push for the development of a gas-based economy.
On its side, the country launched Africa’s first offshore gas mega-hub last year when it signed definitive agreements with Marathon Oil, Noble Energy, Atlas Petroleum, Glencore and Gunvor to process stranded gas from its Alen and Aseng gas fields and offset production decline at the country’s Alba field.
The project is of strategic importance for the country because the Alba field had been until now the sole supplier of gas to its Punta Europa complex, which feeds several industries including an LNG train and a methanol production unit, both seeking expansion. But such receiving infrastructure could also be a godsend for Nigeria and Cameroun who both have several stranded gas fields right across Equatorial Guinea’s maritime boundary and in need of off-take infrastructure.
The country’s vision for gas is simple: it wants to become that gas mega-hub for the sub-region by developing several offshore hubs to monetise neighbouring gas reserves and develop downstream gas industries spurring industrial development and economic growth. At home, its industries need gas.
EG LNG needs long-term gas supplies for its existing LNG export facility and is considering the development of a second LNG train. Meanwhile, the Atlantic Methanol Production Company has agreed to support the ongoing Year of Investment initiative by expanding its methanol production unit and diversify output into methanol derivatives. As demand for gas grows, the country’s message to its neighbours is very straightforward: we provide the processing and off-take infrastructure, you provide the feedstock.
The gas mega-hub the country is developing in the Gulf of Guinea will have its own challenges. Nigeria does not belong to OHADA and operates under a different legal regime than that of Equatorial Guinea and Cameroon. The three countries also have different petroleum legislation, fiscal regimes and PSC terms. These are all factors that need to be addressed to turn vision into reality.
In a multilateral meeting in Malabo, Gabriel Mbaga Obiang Lima, minister of Mines and Hydrocarbons of Equatorial Guinea, has taken a proactive step in creating an executive committee tasked with the acceleration of the progress of the gas mega-hub.
The team is also tasked with ensuring that gas is transported in and outside of the region. The meeting, which gathered Marathon Oil, EG LNG and state-owned entities like GEPetrol and Sonagas, sends a clear signal that a public-private partnership is in the making.
