Marathon Oil, Chevron ink Equatorial Guinea gas deal

A unit of Marathon Oil has signed a heads of agreement with Chevron’s Noble Energy and the government of Equatorial Guinea to progress the next two phases in the development of the regional gas mega hub.

The new deal builds on the success of Phase I, aligning all parties on necessary commercial principles to advance Phases II and III of the GMH, according to a statement by Marathon Oil.

Phase I of the hub was achieved with the tieback of the Alen field to Punta Europa, which delivered first gas in February 2021.

Also, Alen gas is processed under the combination of a tolling and profit-sharing arrangement through Alba plant’s onshore LPG plant, in which Marathon Oil has a 52 percent interest, and the 3.4 mtpa Equatorial Guinea LNG plant on Bioko Island, where Marathon Oil owns a 56 percent interest.

Second and third phase

Phase II involves processing Alba gas from January 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 Oil said.

The firm has a 64 percent interest int the Alba field.

Moreover, Phase II will materially increase Marathon Oil’s exposure to global LNG pricing and is expected to improve the company’s earnings and cash flow in Equatorial Guinea, it said.

As per the third phase, this phase is expected to facilitate gas processing from the Aseng field at Punta Europa facilities.

Other opportunities

Additionally, a recently established bilateral treaty on cross-border oil and gas development between Equatorial Guinea and Cameroon provides other opportunities to further expand the GMH through fast-track monetization of cross-border wet gas fields, Marathon Oil said.

Beyond the commercial benefits, the expanded development also secures future fuel gas volumes for Equatorial Guinea’s power generation needs, provides longer-term employment opportunities for Equatoguineans, and will positively impact the local communities’ economy, the firm said.

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