Equatorial Guinea’s government has approved a contract to Saipem from Noble Energy covering pipeline installation for the US independent’s further development of the Alen gas field off Equatorial Guinea.
“We have sanctioned with Noble Energy the contract for Saipem for the installation for the backfilling,” Equatorial Guinea’s Minister of Mines & Hydrocarbons Gabriel Obiang Lima said on the sidelines of the Africa Oil Week conference in Cape Town.
A statement from the ministry later said it had approved the $100 million contract for Italy’s Saipem to build the gas processing unit serving the Alen field.
The ministry has also approved the proposed petrochemical complex in Punta Europa "within the framework of Equatorial Guinea’s gas monetisation project", according to a statement issued by ministry spokesman Robstiano Ndong Mangue.
Upstream reported in July that the Italian contractor was in pole position to land the deal to install the 24-inch, 70-kilometres pipeline to transport 950 million cubic feet per day of gas from the existing Alen platform to facilities on Bioko Island.
“This is mainly to be able to bring gas from the Alen field to Punta Europa (and) to have infill for our LNG plant but also possible for other projects,” he added, referring to the Equatorial Guinea liquefied natural gas plant.
US independent Marathon Oil has a gas complex at Punta Europa on Bioko Island.
“This is going to allow that this backfilling project goes according to plan. We will have first production from that field (Alen) in the first quarter of 2021,” Obiang added. Production will peak at 300 million cubic feet per day of gas.
Upstream has previously reported that that Saipem has established a joint venture with Alduco Engineering, a Nigerian company with an Equatorial Guinea base in Malabo on Bioko Island.
News of Saipem’s front runner status for the pipeline job followed the award to Tenaris of a contract to supply 21,000 tonnes of line pipe for the project, which will be manufactured at its Confab welded pipe mill in Pindamonhangaba, Brazil.
The final investment decision was taken earlier this year on what Noble calls the Alen gas monetisation project.
In May 2018, Noble struck a deal with the Equatoguinean government and Marathon to pipe associated gas — currently being re-injected — from Alen to the Equatorial Guinea LNG facility, just outside Malabo.
The heads of agreement established a framework for Alen’s gas to be processed through Marathon’s single-train liquefaction facility and its liquid petroleum gas plant at Punta Europa.
The gas project calls for modifications to the existing Alen fixed platform and construction of the pipeline while primary condensate will continue to be produced and lifted offshore via the Aseng floating production, storage and offloading vessel.
Ultimately, the project aims to tap more than 3 trillion cubic feet of gas that Noble has identified in Block O — which hosts Alen — and Block I, although initially about 600 billion cubic feet will be exploited.
Gas from Alen will supplement declining supplies to the EG LNG plant from Marathon’s Alba field.
The intention of the government is for Alen to become a gas commercialisation hub in the Rio Muni basin, taking production from fields in both Equatorial Guinea and, potentially, Cameroon.
Noble’s partners in Block O are Glencore and state-owned Gepetrol while its partners in Block I are Glencore, Gepetrol, Atlas-Oranto Petroleum and Gunvor Resources.
Marathon’s partners in the LNG plant are state-owned Sonagas, Mitsui and Marubeni while its partners in the LPG facility are Noble and Sonagas.
Obiang also gave a teaser of an impending “major development” at Punta Europa, which will be announced next month.
“We are going to have a major development in Punta Ropa. We cannot announce it yet, but (after) the technical committee meeting we will have in Houston we will make it public – so we will announce it in December.”
That meeting will be with Kosmos Energy, ExxonMobil, Marathon and other operators in EG. Also in that meeting the precise size and other information on Noble and Kosmos’ discoveries this year will be revealed, as will potential development options, he said.
“Clearly this discovery is very similar to Noble’s,” Obiang said of the Kosmos find
“(Both are) very important for us because they are close to current installations, so that means that some of the key alternatives that we will be looking at will be tie-ins to current installations.
“That is an economic benefit for us because they can be put in production quicker – either talking next year or the year after.”