Russia grants
StatoilHydro a stake in giant natural gas project
By Miriam Elder Moscow TimesPublished: October 25, 2007
MOSCOW: Gazprom on Thursday signed a deal with StatoilHydro of Norway
to develop the Shtokman natural gas field, dashing the hopes of U.S.
energy companies of getting a stake in the giant Arctic project.
Under the deal, StatoilHydro was to get a 24 percent stake in the
field's operating company, joining Total of France, which in July was
granted the right to a 25 percent stake. Gazprom will retain majority
control of the company, and will retain ownership of the field
itself. "We have giant reserves of gas in the Barents Sea, while
our partners from Norway have good experience in production and
transportation of gas in harsh Arctic conditions," said the Gazprom
chief executive, Alexei Miller.
Gazprom, a state-run firm, shocked observers a year ago when it said it
would develop Shtokman on its own, amid increasing signs of energy
nationalism in Kremlin policy. It has since backtracked, allowing
foreigners to develop a project seen as one of the world's most
challenging.
Shtokman, once developed, is expected to be a prime future source of
energy for Europe and North America.
Gazprom had also considered the major U.S. oil companies Chevron
and ConocoPhillips as partners, but Chevron pulled out earlier in the
process. ConocoPhillips conceded defeat Thursday. "ConocoPhillips
is disappointed, but we wish Gazprom and its new partners well," said a
spokeswoman, Janet Grothe. "We will continue exploring opportunities
with Gazprom and others that will enable us to provide a long-term
supply of natural gas to the U.S. and EU markets."
StatoilHydro, which was formally created Oct. 1 through the merger of
Statoil and NorskHydro, was long expected to get a stake in Shtokman,
owing to its experience in similarly harsh conditions in the Barents
and North seas.
Underlying the political nature of the decision, the Kremlin was first
to announce the deal. President Vladimir Putin of Russia and Prime
Minister Jens Stoltenberg of Norway discussed the deal in a telephone
conversation early Thursday, the Kremlin said.
"It was a kind of political decision announced to the country," said a
Kremlin spokesman, Dmitry Peskov. "The company was handling
negotiations and only after that did the leaders hold a telephone
conversation."
Analysts hailed the announcement, saying Gazprom lacked the technology
to develop the field without foreign partners. With an estimated 3.7
trillion cubic meters of natural gas in reserves, Shtokman is believed
to be the largest undeveloped offshore gas field in the world and is
set to become a key supplier of liquefied natural gas, or LNG.
"They needed someone with experience and financing for this project,
and StatoilHydro fits the bill," said Alexander Burgansky, an analyst
at Renaissance Capital.
Neither Gazprom nor StatoilHydro released details of the agreement, but
analysts said a deal similar to the one made with Total would likely
allow the Norwegian firm to account for some of the field's reserves in
its financial results.
Total will be able to book 25 percent of the field's reserves,
equivalent to its stake in the operating company, which is responsible
for planning, financing and building the project's first phase. That is
equivalent to nearly one billion barrels of oil, the Total chief
executive, Christophe de Margerie, said last month. De Margerie also
said the firm would invest at least $10 billion in the project, the
estimated cost of which is $20 billion. Final investment decisions are
to be made in the second half of 2009, StatoilHydro said.
The equity stakes in the operating company, Shtokman Development
Company, will also allow the firms to own the field's infrastructure
for 25 years from the start of production.
Gazprom has said it planned to produce 23.7 billion cubic meters of
natural gas from Shtokman for pipelines to Europe by 2013, with liquid
natural gas production likely aimed at the North American market
starting the next year. With 49 percent of the equity doled out
between Total and StatoilHydro, the competition to develop the field
was closed, since Gazprom has stated that it will keep a majority stake
in the project.
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Techint to build
pipeline for Peru LNG
Source: www.downstreamtoday.com / Peru LNG 08-10-07
Peru LNG, the largest infrastructure project in Peru's history,
announced the start of pipeline construction by awarding the pipeline
construction contract. Following an international competitive bidding
process including extensive evaluation, the contract has been awarded
to Techint Construction is expected to start in January 2008.
"Peru LNG has adopted and will implement all the highest standards,
both Peruvian and international, in the design and execution of
pipeline construction," said Barbara Bruce, General Manager of Peru
LNG. "We have developed comprehensive Contractor Management Plans
(CMPs) that cover every facet of pipeline construction to assure that
these standards are met."
Peru LNG's world-class management team, which consists of experts in
construction, engineering, health and safety, security, environmental
and community affairs, will maintain complete oversight of the
construction process with audits, inspections and quality control on a
daily basis.
Techint has extensive experience in the specific areas where the
construction will take place and the largest, skilled workforce to
implement the project. The 408 km of line pipe from which the pipeline
will be built was ordered in February and March of this year. It is
currently being manufactured and inspected to international standards,
and the first delivery is due in November.
"Peru LNG is responsible for providing a safe, high quality pipeline
and is committed to making this project one of the most respected in
the world," added Bruce.
Peru LNG is a world-class infrastructure project that will position
Peru as a leader in the liquid natural gas industry in Latin America.
The income generated by Peru LNG will be a great stimulus of
development and growth for the country and its people.
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Angola LNG project
to produce 5 mm tons of gas per year
Source: http://allafrica.com / Angola Press Agency 06-10-07
The Angola LNG project expects to produce 5 mm tons of gas per year, as
from 2012, thus enabling the country to profit from the preserving of
the environment and use of the fluid for commercial and industrial
goals.
Oil minister, Desiderio Costa gave the information in Luanda, whilst
presiding over the closing ceremony of the 2nd Deepwater Offshore West
Africa (DOWAC) Exploration and Production Conference and Exhibition.
The official defended the steady reduction of gas burning resulting
from oil exploration as the priority of the Angolan government. In this
aspect, he also defended the total elimination of gas burning, through
its use for industrial and domestic aims until 2010.
Minister Desiderio Costa referred that future challenges of the sector
are enormous, demanding the implementation of better planned
strategies, considering the evolution of the oil and gas sector in the
African continent. To achieve this goal, he considered essential the
need for African oil producers to capitalise the experiences acquired
by national firms, turning them into autonomous operators, leading
contractors and those participating in the whole oil business chain.
Simultaneously to the conference, an exhibition was held to witness the
development of main actors of the petroleum industry and of some
national universities (Agostinho Neto, Lusiada, Private, Jean Piaget
and Independente Universities).
Sonangol and the Oil Ministry, in partnership with some operating
companies and of providing services and contractors, technically and
professionally supported the conference, co-ordinated by an
International Steering Committee.
The Cabinet Council approved, in its session of 13 June 2007, a
memorandum of understanding between the Angolan Oil Ministry and the
Ministry of Trade, Industry and Energy of South Korea for join
activities in the fields of oil and gas exploration.
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China to construct LNG
supertankers
Source: www.zoomchina.com.cn 09-10-07
China plans to compete with South Korean and Japanese shipyards in
building larger liquefied natural gas carriers to meet soaring demand
for the fuel, a Lloyd's Register official said.
The Marine Design and Research Institute in China received approval
from the government in September to invest as much as yuan 180 mm, or $
24 mm, to develop designs for tankers that can carry 200,000 cm, or 7.1
mm cf, of the gas, said John Stansfeld, the director of Lloyd's
Register Asia, which inspects and certifies ships. LNG ships now
typically range from 120,000 to 135,000 cm.
Chinese shipyards are focusing on complex and pricier carriers to
expand their range. The Commission of Science, Technology and Industry
for National Defence in China last year announced a five- year plan to
encourage local shipyards to graduate from oil tankers to building
floating production platforms and LNG carriers.
"Domestic and foreign buyers of LNG carriers will have multiple choices
for LNG shipbuilding," Stansfeld said. BP operates the largest LNG ship
in the world, the 155,000-cubic-meter British Emerald built by Hyundai
Heavy Industries, the largest shipbuilder. The ship is 288 meters, or
945 feet, long by 44 meters wide, with a crew of 23.
Qatar has ordered bigger tankers. There are 45 LNG tankers of 200,000
cm capacity on order at Korean shipyards for Qatari gas projects,
Robert Tustin, the technical manager at Lloyd's Register Asia, said in
April. These orders include tankers of 209,000 cm, known as the Q-flex,
and 266,000 cm, or Q-max, said Tustin. Each Q-max carrier costs about $
300 mm.
Dalian Shipbuilding Industry, owned by China Shipbuilding Industry,
plans to build similar carriers of 250,000 cm in capacity, Stansfeld
said. It is developing propulsion systems using dual fuels.
The shipyards plan to diversify sales outside the domestic market.
China last year overtook Japan as the second-biggest shipbuilding
nation in the world as new orders more than doubled by tonnage. South
Korea is the biggest.
Chinese shipyards "are showing people their capabilities," said Russell
Barling, a spokesman for Lloyd's Register Asia. "They are not talking
prices."
Korean yards grabbed 79 % of LNG carrier orders last year, according to
the Korea Shipbuilders' Association, which cited figures from Lloyd's
World Shipbuilding Statistics.
Hudong shipyard in China, owned by China State Shipbuilding, is
currently building five LNG carriers of 147,000 cm in capacity at its
Shanghai yard. Three are dedicated to the existing Guangdong Dapeng LNG
project and the rest to the Fujian LNG terminal, which may start
importing gas from Indonesia next year, Stansfield said.
The first ship, expected to be delivered in December, is preparing for
sea trials, with gas trials to be carried out in either Shenzhen or
Guangzhou. China may need 25 carriers once the import terminals start
operating at full capacity, Stansfeld said.
As of July, there were 231 LNG carriers worldwide and another 146 are
on order from shipyards.
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Galp and PdVSA to explore
LNG and storage opportunities
Source: www.downstreamtoday.com / Galp Energia, SGPS, S.A. 10-10-07
Portugal's Galp Energia, SGPS, and Petroleos de Venezuela (PdVSA)
signed a memorandum of understanding to study the development of joint
projects in the energy sector and the establishment of forms of
cooperation between the two companies, including the possibility to
develop exploration, production and oil and gas procurement operations.
The agreement provides for information and experience to be shared
relating to the development of both countries' energy sectors and for
the exchange of specialists providing technical assistance for the
execution of studies and projects in the energy sectors of Portugal,
Venezuela or third countries.
The agreement also covers the identification of business opportunities
allowing the Venezuelan company to strengthen its presence in Europe
and to promote joint cooperation, thereby maximizing synergies between
the operations of PdVSA and other European oil companies. The short-,
medium- and long-term projects to be examined include the following:
-- The possibility for Galp Energia to join oil exploration &
production projects, currently under way in Venezuela;
-- Galp Energia's participation in the Magna Reserva project consisting
of the studies for quantifying and certifying oil reserves in the
Orinoco Oil Belt as well as developing and processing those reserves;
-- Performance studies to evaluate the possibility for Galp Energia to
participate both in the Mariscal Sucre Project, which aims to develop
Venezuela's offshore gas, and the terminal to liquefy natural gas that
PdVSA plans to build at the Gran Mariscal Ayacucho Industrial Complex;
-- The possible investment in the strategic storage of crude from
Venezuela at Sines, for the purpose of supporting marketing operations
in Southern Europe;
-- The possibility for Venezuela to become a relevant supplier of crude
to Galp Energia.
Venezuela is the country in the western world with the largest volume
of proven reserves, estimated to be over 77 bn barrels excluding the
Orinoco Oil Belt. Companies such as Chevron, Total, Statoil, BP and ENI
are currently PdVSA's partners in various projects in Venezuela. PdVSA
estimates that, following the Magna Reserva project, the Orinoco Oil
Belt's reserves may prove to be as large as 235 bn barrels.
In its capacity as the Portuguese benchmark oil and gas operator, Galp
Energia is actively searching for business opportunities to secure the
long-term procurement of oil and gas required to supply its Portuguese
and Spanish markets.
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Angola vows to
eliminate gas flaring by 2010
Source: www.rigzone.com / Xinhua News Agency 08-10-07
The Angolan government has worked out a strategy to totally eliminate
gas flaring in 2010 through popularizing the use for industrial and
domestic purposes.
Angolan Oil Minister Desiderio Costa was quoted as saying that the
government has placed step-by-step reduction of gas flaring resulting
from oil exploration as one of top priorities on the work agenda.
At the closing session of the Second Deepwater Offshore West Africa
Exploration and Production Conference, the minister said to achieve
this goal it is essential for African oil producers to capitalize the
experiences acquired by national firms, turning them into autonomous
operators, leading contractors and those participating in the whole oil
business chain.
According to the minister, the Angola LNG (Liquefied Natural Gas)
Limited has carried out a LNG project to produce five mm tons of gas
annually as from 2012, thus enabling the country to profit from
environmental protection and use of the fluid for commercial and
industrial goals.
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Nigeria to invest in
petrochemical plants
Source: http://allafrica.com / This Day www.gasandoil.com 09-10-07
The Federal Government will soon embark on massive investment in
petrochemical plants, as well as development of enterprise centres and
industrial clusters around the country.
The Minister of Commerce and Industry, Engineer Charles Ugwuh who made
the statement in Lagos while addressing traders at the Lagos
International Trade Fair Complex said his ministry was concluding talks
with the President towards injecting massive investment to set up
petrochemical processing plants and enterprise centres in the country.
"I am already talking with the President and we are looking at bringing
in money to build petrochemical plants and build the enterprise centres
that will form productive platforms. We are not talking about private
sector investment in this case because we know that only the government
has the capacity to kick start huge investment in the petrochemical
industry and industrial clusters," Ugwuh said.
The Minister said the petrochemical plant which will use inputs from
Nigeria's thriving petroleum industry will turn out products that will
be useful in boosting local production of some finished goods which are
currently not possible to manufacture in Nigeria because of the
non-availability the basic materials.
Ugwuh explained that going by the market research he conducted during a
recent trip to China such petrochemical plants may cost about $ 5 to $
7 bn to set up in Nigeria. Ugwuh who also spoke concerning the
controversial concession of the Lagos International Trade Fair Complex
to Aulic Nigeria stated that the government is committed to reviewing
the process because of the backlash of emotional responses that have
trailed the entire process.
"Having acknowledged that the various stakeholders have already
invested huge funds towards the development of the complex, if we treat
their dissatisfaction with the transfer of the asset to Aulic
carelessly it would amount to insensitivity on our part as a
government. This is why we are taking steps to review the process and
ensure that justice is done," he said.
"I have been told that the Auto Spare Parts and Machinery Dealers
Association (ASPAMDA), The Balogun Business Association, Progressive
Traders Association, Lake View Resort, Roman Properties, Lagos Chamber
of Commerce and Industry and others have invested not less than N 110
and N 150 bn in the complex and so to transfer the management of the
asset to a company without taking the interest of these stakeholders to
account is not proper.”
This is why we have decided to bring all the stakeholders together and
come up with an acceptable arrangement for all parties involved," he
added. He said the government did not have anything against the winner
of the concession in the complex-Aulic Nigeria in its decision to
review the process that led to their winning of the asset but that
government was interested ensuring that all the groups that have stakes
in the complex are fairly treated.
Ugwuh, disclosed that the Federal Government had set measures in motion
to review the concession of the Lagos International Trade Fair complex.
He said the decision was aimed at ensuring that the Organized Private
Sector is carried along in the economic development of the country. The
Minister commended NACCIMA for the level of commitment it has shown and
the huge investment made by its members in the economy. Guru assured
NACCIMA that urgent steps would be taken to resolve the issue of the
concession of the LITFC.
"The issue of the LITFC is a serious challenge but luckily for me with
the help of my staff I have all the information about this matter. I
don't have any doubt that the concession will be reviewed. This is
obvious. At the BPE meeting I stated that this is one of the key
transactions that I would like to revisit. So, we will revisit the
matter. … I will talk to all parties concerned and we will resolve the
matter."
Ugwuh told the delegation that he had just concluded a retreat with the
heads of department and management staff of the Ministry and the heads
of parastatals underthe Ministry with the theme: "To Realign the
Ministry's mandate Towards Achieving Vision 20-2020."
Ugwuh stated further that he was also planning to hold a retreat with
the organised Private Sector with the aim of refocusing industrial
strategies for economic development in the country. He said at the end
of the retreat, he would meet with the president to let him know what
the private sector wants in order to move the economy forward.
The Minister also challenged the organised private sector to think
proactively and play an active role in some development projects in the
country such as the Lagos Mega City Project and the Free Trade Zone in
Ogun State. He said some Chinese investors in collaboration with the
Ogun State Government had established Free Trade zones in Igbesa where
huge investments have been made.
He challenged NACCIMA members to take interest in these vast business
opportunities to their advantage.
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Russia may miss
2011 gas-flaring target
www.gasandoil.com 10-10-07 Source: The Moscow Times
The government may fail to meet an ambitious target set by President
Vladimir Putin to cease almost all wasteful flaring of gas during oil
production as early as 2011, an Industry and Energy Ministry official
said. Alexander Savinov, the head of the ministry's oil industry
regulation department, said gas flaring could be reduced to 15 % of
production by 2011, instead of the 5 % demanded by Putin.
"It is planned to raise the associated gas utilization to 85 % of
production by 2011, gradually raising it to 95 % by 2015," he said.
The ministry has said Russia was losing up to $ 13 bn a year because of
wasted gas associated with oil. Russia aims to approve legal measures
to encourage oil firms to spend billions of dollars on cutting gas
flaring to protect the environment and save gas that is burned at oil
fields because there is no infrastructure to process it for use.
Savinov said some 24.4 % of the country's 2006 associated gas
production of 58 bn cm was wastefully flared. He said major oil firms
were responsible for 83 % of associated gas production but that gas
flaring differed significantly from company to company.
Surgutneftegaz, the country's fourth-largest oil company, is the leader
in terms of associated gas utilization, with production of 15.6 bn cm,
of which only 1 bn cm is flared.
Rosneft extracted 8.7 bn cm and flared 3.6 bn cm, LUKoil produced 7 bn
cm of which 1.9 bn cm was flared, and No. 3 oil company TNK-BP
extracted 10.9 bn cm and flared 2.3 bn cm.
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PTTEP plans seismic
campaign in northeastern Thailand
By an OGJ correspondent BANGKOK, Oct. 15
PTT Exploration & Production PLC (PTTEP) plans to launch early next
year a seismic campaign on Blocks L21/48, L28/48, and L29/48, which
PTTEP acquired last year in northeastern Thailand.
It includes acquisition of 1,200 line km of 2D seismic in parts of Udon
Thani, Khon Kaen, Nakhon Ratchasima, and Chaiyaphum provinces.
PTT expects to start in January after the Office of Natural Resources
and Environmental Policy and Planning approves the company's
environmental impact assessment.
PTTEP Pres. Maroot Mrigadat said the areas have high petroleum
potential as they are lying near two producing gas fields: Nam Phong
and Phu Horm.
The result of seismic survey will determine a drilling program on the
blocks, which cover 12,000 sq km.
PTTEP is the operator of the blocks with a 70% share while Malaysia's
Resourceful Petroleum Ltd. holds a 30% stake.
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Belarus Eager for Second
Pipeline
United Press International October 15, 2007
Belarus is offering Russia five years of free transit to break ground
on the second leg of a pipeline delivering natural gas to central
Europe.
"Start building the second line, and if you are afraid it will be
unprofitable, we will exempt you from transit taxes for five years,"
Belarusian President Alexander Lukashenko said at a news conference
Friday in Minsk, RIA Novosti reported Saturday.
The pipeline runs from northwest Siberia to Russia's border with
Belarus and through Germany into Poland for a total of 1,240 miles. The
second leg would financially benefit Belarus and further tighten
Russia's control of the gas supply to energy-hungry Europe.
In May, Russia's Gazprom's signed a deal to buy 50 percent of
Belarusian pipeline operator Beltransga and use it for natural gas
transit to central Europe.
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Vanco Signs Ukraine's
First Deepwater Black Sea Agreement
Vanco Energy 10/19/2007
Today the Government of Ukraine signed the Prykerchenska Production
Sharing Agreement (PSA) with Vanco International Ltd., a subsidiary of
Houston-based independent Vanco Energy Company. The agreement
represents the culmination of the tender process through which in April
2006 Vanco was granted the right to negotiate the first license to
explore the deepwater part of Ukraine's Black Sea. The signing of the
landmark Production Sharing Agreement gives Vanco the opportunity to
explore and develop the highly prospective Prykerchenska Block. Work
will begin immediately on a detailed exploration program which will
include an extensive 3D seismic survey in 2008 followed by deep water
drilling.
Located to the southeast of the Crimean Peninsula, the Prykerchenska
block covers nearly 13 thousand square kilometers or about one-third of
Ukraine's deepwater area with water depths ranging from 500 meters to
over 2,000 meters. Exploration will concentrate on the Tetyaev High, in
water depths greater than 2,000 meters where Vanco has identified a
series of large structures, and on the shallower Sudak Folded Belt
where Vanco has identified numerous attractive prospects.
The approval for Vanco comes as Ukraine seeks to boost oil and gas
output by a third within the next several years. If exploration efforts
are successful, the development of the project will require investments
of more than $20 billion. "With the Prykerchenska Production Sharing
Agreement now in place," says Vanco's Chairman and President Gene Van
Dyke, "we can proceed with plans to explore fully this frontier area of
Ukraine's deep Black Sea."
Dedicated to international deepwater exploration since 1996, Vanco has
successfully operated drilling programs offshore Morocco and Côte
d'Ivoire in the last three years. In addition to Ukraine, the Houston
independent has deepwater exploration programs offshore Gabon,
Equatorial Guinea, Ghana and Cote d'Ivoire.
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Indonesia to Extend
Period of LNG Exports to Japan by 10 Years
Asia Pulse Pte Ltd 10/22/2007
URL: http://www.rigzone.com/news/article.asp?a_id=51779
Indonesia will extend the period of its liquefied natural gas (LNG)
exports of 25 million tons to Japan for another 10 years after the
current contract expires in 2010-2011, a spokesman said.
"Indonesia will surely extend the contract on its LNG exports to Japan
for 10 years," Iin Arifin, vice president of state-owned oil company
Pertamina, said here on Monday.
He said the LNG exports would be carried out in two stages with three
million tons annually in the first five years and two million tons per
annum in the second five-year period.
Under this scheme, he said, 15 million tons of LNG would be exported in
the first five years and 10 million tons in the second five years.
"We are still negotiating the price of the LNG exports," he added.
He said Japan had asked that Indonesia ship 12 million tons every year
based on the old contract but the volume Pertamina would export should
be based on approval of BP Migas, the country's oil and gas regulating
body.
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Sea of Azov Rosneft,
Lukoil JV Makes Find
AFX News Limited Wednesday, October 17,
2007
OJSC Rosneft and Lukoil OAO said a joint venture they operate has found
hydrocarbons in the first well drilled in the Sea of Azov shelf,
Interfax reported.
Based on test data from the well, the Priazovneft joint venture
anticipates the field contains confirmed reserves of about 5 mln tonnes
of oil equivalent.
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Equatorial Guinea
Launches LNG Project
by Obafemi Oredein Dow Jones Newswires IBADAN, Nigeria, Oct. 18,
2007
The Equatorial Guinea liquefied natural gas, or EG LNG, project has
been formally launched at a ceremony in Malabo, the country's capital,
Radio Nigeria reported.
It said the launch Wednesday was attended by Presidents Umaru Yar`adua
of Nigeria, John Kufour of Ghana and Frederico Menendez of Sao Tome and
Principe.
The $1.5 billion EG LNG plant, which has a 3.4 million tons per annum
capacity, was built on the northwest side of Bioko Island at Punta
Europe, near Malabo. It made its first shipment to the U.S. in May 2007.
Ken Woodworth, EG LNG managing director said at the launch that the
plant was completed six months ahead of schedule and within budget. He
said that with Train 1 in place, the company would supply 3.4 million
tons of LNG per annum to BG Gas Marketing Ltd for the next 17 years.
"It is our hope that this train will be a catalyst for the development
of future trains for EG LNG, further raising Equatorial Guinea's
standing among the world's LNG producing countries," Woodworth said.
Clarence Cazalot, president of U.S.-headquartered Marathon Oil Corp.
(MRO) said work on the plant had set a new standard with which future
worldwide LNG projects would be judged.
Marathon Oil Corp. which owns 60% of the shares in the project and the
other EG LNG shareholders commenced preliminary construction of the
Train 1 project in December 2003. Equatorial Guinea has an estimated
reserve of 30 trillion cubic feet of gas.
The gas for Train1 is sourced from the Alba field in Equatorial Guinea.
A second train is currently being considered which will rely on gas
being transported from Cameroon and Nigeria.
Shareholders of EG LNG are Marathon with 60% equity shares, Equatorial
Guinea's Sonagas, 25%, Japan's Mitsui Co (8031.TO) 8.5% and Marubeni
Gas Development Co, a wholly owned subsidiary of Marubeni Corporation
of Japan (MARUY) , 6.5%
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