Nigeria and Equatorial Guinea have signed a memorandum of understanding that could see gas from Nigeria fed to a processing complex on Bioko Island.
The Punta Europa site in Equatorial Guinea hosts a methanol and LNG complex that is currently fed by gas from the Alba and Alen-Aseng fields operated by Marathon Oil and Chevron, respectively.
Signed by Timipre Sylva, Nigeria’s Minister of State of Petroleum Resources, and Gabriel Mbaga Obiang Lima, Minister of Mines & Hydrocarbons in Equatorial Guinea, the MoU envisages Nigeria supplying gas from offshore fields to Punta Europa.
This deal, if ratified, could help monetise currently untapped resources, while replacing declining output from Equatoguinean fields.
Details of the tentative deal are unclear, but the MoU is the latest of many deals signed by the Bata-based government over recent years to try to develop Bioko Island as a mega-gas hub for the Gulf of Guinea.
Cross-border gas import arrangements have been signed before — with Cameroon, for example — but have never got off the ground.
Commenting on the MoU, NJ Ayuk, executive chairman of Johannesburg-based African Energy Chamber, urged both ministers “to ensure the rapid implementation of the deal, recognising the role [it] will play in positioning West Africa as a global gas hub.”
He argued that Nigeria’s resources coupled with Equatorial Guinea’s infrastructure and processing facilities: “Will enable gas to be commercialised, resources maximised, and new investment opportunities clarified in West Africa. The world needs gas and Africa can supply it.”
However, with Reuters reporting that Chevron is looking to exit Equatorial Guinea, just a year or so after entering the country with its acquisition of Noble Energy, it is unclear how fast the MoU could be formalised.
Reuters cited sources as saying Chevron had hired investment bank Jefferies to run the sale process which could raise as much as $1 billion.
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