Malabo, Equatorial Guinea — Equatorial Guinea is targeting a final deal with Cameroon to jointly develop gas condensate discoveries on their maritime border following a key investment decision by Noble Energy to develop a nearby gas hub, Equatorial Guinean oil minister Gabriel Obiang Lima said.
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Equatorial Guinea and neighboring Cameroon agreed in 2017 to jointly develop their Yolanda and Yoyo gas condensate discoveries as a single resource but progress on a unitization deal has since stalled.
Earlier this week, Noble Energy took a final investment to monetize gas from its Alen gas condensate field, a project which includes a key pipeline connection from the asset to Equatorial Guinea's existing LNG plant. The deal is key to keep the Punta Europa complex -- home to LNG and LPG plants and the Malabo power station -- well supplied with gas for the coming years.
When the Alen's gas condensate flows come on stream as scheduled in the first quarter of 2021, liquids separated at Punta Europa of around 40,000 b/d can be sold to Cameroon's Limbe refinery, Obiang told S&P Global Platts in an interview.
In return, Obiang said Equatorial Guinea wants Cameroon to commit gas flows from the Yoyo-Yolanda fields to feed the Punta Europa's LNG plant.
"We'll definitely be focused on sending [the liquids] to the Cameroon market," Obiang said. "They are interested in talking about joint development in the area. So if the commercial structure works, they will be more motivated to bring associated gas from Cameroon."
Alen has been producing some 7,000 b/d of condensate via a nearby floating production, storage and offloading vessel since 2013. Obiang said talks to agree on a unification deal with Cameroon for the Yoyo-Yolanda are "going very well."
BIOKO OIL TERMINAL
Onshore, however, Obiang said progress has slowed again on the country's long-running plans for the Bioko terminal, a major West African transit hub for crude and products trading.
OPEC's smallest producer, Equatorial Guinea scaled down its plans for the hub last year after a Saudi investor dropped out of the project.
"We have a difference of ideas of what we want to do," Obiang said. "The investors want to do a massive project while the government wants to do a gradual, phased project. That has been the key problem."
Located on Bioko Island some 32 km off the coast of Cameroon, the Bioko terminal was initially planned to include 22 storage tanks with a total capacity of 1.2 million cu m.
Chinese-state investment funds have offered financing for the terminal after Arabian Energy, a little-known UAE-linked company to Saudi Arabia, dropped out.
THREAT OF NOPEC BILL
Equatorial Guinea's gas-rich fields are pumping a total of some 300,000 boe/d, of which 120,0000 b/d is crude, Obiang said. The country expects in-fill drilling at some of its maturing fields to maintain crude production at current levels in the short term but is pinning its hopes on new finds from a new licensing round announced this week.
Equatorial Guinea is struggling to halt the decline in its oil production with new projects to offset an average 10% annual decline in output from its existing fields.
Obiang has become a key ally for OPEC in Africa, helping to bring the Republic of Congo into the producer group last year, a year after Equatorial Guinea joined itself. Since then, South Sudan and Uganda have expressed an interest in joining OPEC in the future. Obiang acknowledged, however, that OPEC's hopes for further members in Africa would suffer a major setback if the US's anti-OPEC bill -- recently re-introduced in the US Congress -- ever becomes law.
The US' No Oil Producing and Exporting Cartels Act, better known as the "NOPEC, would allow the US Justice Department to sue OPEC for antitrust violations.
"I think South Sudan, Congo, Uganda they see OPEC as the best cooperation," Obiang said. But if NOPEC passes, it will slow down their joining the group.
"Clearly it will have an impact, there is no question about it," he said. "We have US interests and we wouldn't like to be penalized at any moment."
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