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Equatorial Guinea discoveries advance LNG expansion

Not long ago Equatorial Guinea’s authorities had plans to import gas to feed the country’s envisaged second LNG train – but this summer’s drilling off Bioko has proved-up substantial new reserves in territorial waters

The waters of the Gulf of Guinea, just south of Nigeria’s prolific fields, have once again justified their attraction for drillers. After a three-well programme this summer, Ophir Energy said it has found enough gas to the west of Bioko island to support a new liquefied natural gas (LNG) train on Bioko. With the aim of signing-up buyers before east African gas comes to market, the new train is targeted for start-up in 2017-18.

The summer’s three wells – Tonel-1, Fortuna East-1 and Fortuna West-1, all drilled by the Eirik Raude semi-submersible – lifted mean contingent reserves in Ophir’s area, Block R, to over 85 billion cubic metres (cm), the company said. Prospective reserves could raise the total to 173bn cm. Ophir is reckoning on a 3.5m tonnes a year (t/y) LNG train needing 108bn cm of feed gas over a project lifetime, with the figure rising to 153bn cm for a 5.0m t/y train.

The company’s 2013 drilling programme calls for five or six exploration and appraisal wells in Block R, to firm-up reserves in the prospective category. The main targets will be the Fortuna area and a series of structures less than 15 km to the west of Fortuna, close to an earlier find, Lykos. The discovery area is fairly compact – Tonel is about 35 km northeast of Fortuna – and the water-depths are 1,750-1,850 metres at Fortuna and 1,600 metres at Tonel.

The gas is likely to be developed through a subsea-to-beach scheme, flowing to the EG LNG complex at Punta Europa, on the northwest tip of Bioko, through a pipeline about 140 km long. Ophir’s preferred LNG option is a dedicated new train at Punta Europa, to involve fewer stakeholders and facilitate a simpler commercial structure than a shared new train. But the company is keeping its options open by also studying a floating LNG scheme.

The market for the new train is expected to be Asia, where gas from Punta Europa’s first train, of 3.7m t/y capacity and in production since 2007, is delivered. Ophir says the extra transport cost to an Asian destination, compared with LNG from east Africa, is "not significant". The delivered cost to Asia of LNG from Train 1 is lower than that projected for east African LNG because the capital cost is lower – and the cost of a second train at Punta Europa, with existing infrastructure, is estimated to be 65-70% of that of a train at a greenfield site.

New participants

As the project matures, corporate changes are expected. Ophir, UK-registered and with exploration assets in 10 countries in west and east Africa, is expected to seek partners for the upstream development. The company has 80% of Block R, with Equatorial Guinea’s state-owned GEPetrol holding a carried 20%.

For the LNG development, the options include a new train to be owned by an LNG specialist, a train constructed by the owners of the existing complex, or a train owned by a group involving other companies with gas to sell. Participants in the EG LNG complex – Marathon, 60.0%, the state’s Sonagas, 25.0%, Mitsui, 8.5% and Marubeni, 6.5% – have been planning for a second train, and have had front-end engineering and design work carried out for a 4.4m t/y facility.

There has also been progress towards a project with enlarged ownership. In early 2011, under a government initiative, an outline agreement was signed to bring together participants in EG LNG with participants in prospective gas sources, together with other gas interests and state interests. Signatories were the ministry of mines, industry and energy, Sonagas, Marathon and its partners in EG LNG, Ophir and GEPetrol, the companies with interests in Blocks I and O – Noble Energy, GEPetrol, Glencore, Atlas and PA Resources’ Osborne – and the 3G group, which has been advising the government on gas utilisation, comprising Unión Fenosa, Galp Energia and Sonagas.

But if the new LNG train is to be supported entirely by Ophir’s gas, Noble will need a new commercialisation route for the gas it has discovered in Blocks I and O, to the east of Bioko. Noble opened-up the new eastern province when it brought its Aseng condensate field on stream in November 2011, and has large gas discoveries nearby and in Cameroon waters to the east.

Aseng’s gas is reinjected but will be produced later – the field’s floating production, storage and offloading (FPSO) vessel can handle 4.8 million cm/d of gas, together with 80,000 barrels a day (b/d) of liquids. Noble says Aseng production has been running at about 65,000 b/d. Aseng lies in Block I, where interests are Noble, 38.0%, Atlas, 27.55%, Glencore, 23.75%, PA Resources, 5.7% and GEPetrol, 5.0%.

Noble’s next producer lies in the adjacent block to the north, Block O, where interests are Noble, 45.0%, GEPetrol, 30.0% and Glencore, 25.0%. The Alen condensate field is under development for start-up in late-2013, using a fixed platform and subsea wells. Alen will be a gas-cycling development, but has been designed as a hub for future gas commercialisation. Initial liquids production will be 37,000 b/d.

Other discoveries nearby are being studied for development. In Block I there is Yolanda (a gas-condensate field) and Diega (oil and gas-condensate), while Block O holds Felicita (gas-condensate), Carmen (oil and gas-condensate) and Carla (oil). Also close by, but in Cameroon waters, is the YoYo gasfield, in a licence in which Noble holds 50%, with Petronas and the state’s SNH as partners.

There are also prospects for more gas to the northwest of Bioko, where the Marathon-operated Alba field, lying about 35 km offshore, is the source of gas for EG LNG. In June, Marathon signed to explore Block A12, adjacent and to the northwest of the Alba licence.

Alba – held by Marathon, 63.3%, Noble 33.7% and GEPetrol, 3.0% – not only supplies the LNG facility, but is also the source of feedstock gas for a large methanol plant at Punta Europa, operating since 2001. About 1.3bn cm/y of gas is used to produce 20,000 b/d of methanol in the Atlantic Methanol Production (Ampco) facility, where interests are Marathon, 45.0%, Noble, 45.0% and Sonagas, 10.0%. Liquefied petroleum gas is extracted from Alba gas in another facility, owned by Marathon, 52.2%, Noble, 27.8% and Sonagas, 20.0%.

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