Marathon Oil said Friday that it remains on track to begin first shipments of liquefied natural gas (LNG) from its plant in Equatorial Guinea in the fourth quarter of 2007. The LNG project will produce a minimum of 3.4 million metric tonnes per year and all of the supply is under a 17-year agreement with BG Gas Marketing Ltd, which will bring most of it to the LNG import terminal in Lake Charles, LA.

Construction of the project is progressing on schedule with site preparation, construction of accommodation facilities and equipment mobilization fully underway, Marathon said. All major commercial agreements including the upstream gas supply agreement, the LNG concession agreement with the government of Equatorial Guinea and the shareholders agreement for the newly formed Equatorial Guinea Train 1 operating company have been finalized.

In addition, the government of Equatorial Guinea has approved and published an LNG decree law securing the fiscal terms and conditions for implementing the project. GEPetrol, the government owned energy company, will hold a 25% equity participation in the project and will fund its participation through the dedication of oil revenues from current oil production.

Marathon spokesman Paul Weeditz also said Friday that the company still has not made any public announcements regarding participation in any LNG import terminals in North America. A terminal/power plant/water desalinization facility that Marathon had planned to build in Tijuana was rejected by the Baja California government earlier this year as being inappropriate for the location, which was deemed better suited as a residential and small commercial tourism site.

Marathon was “surprised and disgusted by the local government’s decision to expropriate the land,” and has no plans to look for another location in Mexico. Marathon holds a large capacity stake in the existing Elba Island, GA, import terminal, but so far has not announced plans for any other import projects.

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