Marathon to develop more phases of Equatorial Guinea gas hub
New York-listed Marathon Oil Corporation has signed a heads of agreement (HOA) with Equatorial Guinea (E.G) and Noble Energy, a Chevron company, to progress the II and III phases of the Equatorial Guinea Regional Gas Mega Hub (GMH), the company said on March 30.
"We are excited about this critical milestone in the ongoing development of Punta Europa as a world-class hub for the monetization of local and regional natural gas," said Lee Tillman, CEO of Marathon Oil. "This announcement builds on our successful partnership of more than 20 years with the E.G. government, further leveraging and extending the life of E.G.'s world-class gas monetization infrastructure, including the critical E.G. LNG facility, into the next decade."
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Phase I of the GMH was successfully achieved with the tieback of the Alen Field to Punta Europa, which delivered its first gas in February 2021. Alen gas is processed under the combination of a tolling and profit-sharing arrangement through Alba Plant's onshore LPG plant and Equatorial Guinea LNG Holding's LNG facility.
Phase II involves processing Alba Unit gas, from Jan. 1, 2024, under new contractual terms following the legacy Henry Hub-linked Alba sales and purchase agreement expiration at the end of this year. Marathon said phase II will materially increase its exposure to global LNG pricing and is expected to improve its E.G. earnings and cash flow significantly. Phase III of the GMH is expected to facilitate gas processing from the Aseng field at Punta Europa facilities.
Additionally, a recently established bilateral treaty on cross-border oil and gas development between E.G. and Cameroon provides other opportunities to further expand the GMH through fast-track monetization of cross-border wet gas fields, the company said.