Shareholders in the Equatorial Guinea liquefied natural gas (LNG) supply project said Wednesday they expect the project to become a major LNG supply hub for the Atlantic Basin starting next summer.
The sponsors, which include Marathon Oil (60%), Sonagas (the national gas company of Equatorial Guinea), Mitsui & Co. and a subsidiary of Marubeni Corp., announced Wednesday that they awarded a front-end engineering and design (FEED) contract to Bechtel for initial work on a potential second liquefaction train on Bioko Island off the west African coast.
The potential 4.4 million metric ton train would be in addition to Train 1, which is scheduled for completion in mid 2007. Both trains would serve Atlantic Basin markets. BG LNG owns the rights to all of Train 1’s LNG supply and will bring much of it to the United States. A Marathon spokesman said it was too early to say exactly which market Train 2’s supply would serve.
The two trains would commercialize large volumes of stranded natural gas offshore Equatorial Guinea and other significant gas resources in the Gulf of Guinea. Key to the construction of Train 2 is securing long term gas supply agreements with the owners of surrounding gas resources.
At this time, the shareholders are in discussions with gas resource holders in Equatorial Guinea, Nigeria and Cameroon to secure the necessary supplies. Upon securing adequate supplies and completion of the FEED, the shareholders expect to make a final decision to proceed sometime in 2007.
The FEED work is expected to be completed by the end of the first quarter of next year. Train 2 includes feed gas metering, liquefaction, refrigeration, ethylene storage, boil-off gas compression, product transfer to storage and LNG product metering.
The companies said construction of LNG Train 1 is running ahead of schedule. Train 1 will have a capacity of 3.4 million metric tons/year. As of the end of the second quarter of this year, the project was 87% complete on an engineering, procurement and construction basis.
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