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Sunday, December 4, 2022

Nigeria and Equatorial Guinea signs gas agreement

Nigeria and Equatorial Guinea have inked a memorandum of understanding that may see Nigerian gas pumped into a Bioko Island processing plant.  

The Punta Europa location in Equatorial Guinea has a methanol and LNG complex that is currently fueled by gas from Marathon Oil’s Alba and Chevron’s Alen-Aseng sources. 

The MoU, which was signed by Nigeria’s Minister of State for Petroleum Resources Timipre Sylva and Equatorial Guinea’s Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima, envisions Nigeria providing gas from offshore resources to Punta Europa. 

If confirmed, this agreement between Nigeria and Equatorial Guinea has the potential to help monetise hitherto, unexplored resources while also replacing falling output from Equato-guinean 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 commercialized, resources maximized, 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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