Guinea eyes European gas hub

EQUATORIAL GUINEA IS forging ahead with a gas gathering project that it hopes will double the country's output, deepen links with gas-hungry European nations and provide electricity to Cameroon. Germany's E.ON Ruhrgas, Spain's Union Fenosa and Portugal's Galp Energia will help state gas company Sonagas complete a draft gas master plan for Equatorial Guinea by the end of the summer, according to Gabriel Obiang Lima, Deputy Mines and Energy Minister.

The consortium, known as 3G, is central to a drive by sub-Saharan Africa's third largest oil producer to tap into its own and regional natural gas reserves, most of which are lost due to flaring from wells. Equatorial Guinea produces 3.7mn tonnes of liquefied natural gas from its first processing train that started production at its Punta Europe terminal in May 2007. Asked by how much 3G would increase output, Lima said: "Being very conservative, I would say one more (LNG train)." Although still early in its conception, Lima said the project is expected to cost a minimum of $4 bn and would include an LNG plant, pipeline and other projects linked to energy production from gas. "We want to do an integrated project ... Equatorial Guinea is more gas prone than oil prone," he said.

Despite world gas prices having plummeted, Lima believes Europe will be central to his country's future. "They are consumers," he said of Germany and Spain. "If the market is going to sign long term contracts, we will secure it for them." Equatorial Guinea has been in talks with Gulf of Guinea neighbours Nigeria and Cameroon about the possibility of buying their gas to then export from the Malabo hub. Cameroon could benefit from the partnership by buying discounted electricity from a power plant that would be set up in Equatorial Guinea, a country split between mainland Africa and the island of Bioko, where Malabo is situated. "What we are proposing is to sell them very cheap kilowatts ... Cameroon can sell the electricity to its neighbours," Lima said.

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