- The national oil company of Equatorial Guinea and its international partners are set to start producing and ship liquefied natural gas by the fourth quarter of 2007. All major commercial agreements to facilitate this production have now been finalised, the companies announced today.
The Texas-based company Marathon Oil, which is coordinating the Equatoguinean liquefied gas project, today published a statement saying the project was now "on track for a 2007 start-up." The project signifies a widening of the oil and gas related sector in Equatorial Guinea, which still principally is exporting crudes - some of it directly from the offshore oil fields.
Marathon Oil and country's national oil company, Compañía Nacional de Petróleos de Guinea Ecuatorial (GEPetrol), today had "achieved key milestones in the development of the companies' liquefied natural gas (LNG) project in Equatorial Guinea which remains on track to begin first shipments of LNG in fourth quarter 2007," the US company said.
All major commercial agreements - including the upstream gas supply agreement, the liquefied gas concession agreement with the government of Equatorial Guinea and the shareholders agreement for the newly formed Equatorial Guinea Train 1 operating company - had now been finalised, according to Marathon Oil.
In addition, the Equatoguinean government had approved and gazetted a liquefied natural gas law decree, "securing the fiscal terms and conditions for implementing the project," the company said.
Government-controlled GEPetrol is to hold a 25 percent equity participation in the project and will fund its participation through the dedication of oil revenues from current oil production. These funding arrangements were expected to be finalised in the near future, at which time the companies are to announce a final investment decision.
The liquefied natural gas project is expected to produce a minimum of 3.4 million metric tonnes per year. BG Gas Marketing Ltd (BGML) - a former part of Britain's state gas monopoly - is to purchase production from this project for a period of 17 years, according to the Marathon Oil statement.
- Construction of the project is progressing on schedule with site preparation, construction of accommodation facilities and equipment mobilisation fully underway, the statement added.
The Texan company however noted that there were certain uncertainties regarding the 2007 start-up of the project. These were attributed to GEPetrol's funding arrangements and possible delays in obtaining necessary government and third-party approvals during execution of the project.
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