US independent Noble Energy has struck a deal with the Equatorial Guinea government and Marathon Oil to begin piping associated gas from its Alen field east of Bioko Island to the EG liquefied natural gas plant, write Iain Esau and Barry Morgan.

A heads of agreement has been signed establishing the framework for Alen's gas to be processed through the Marathon-operated liquefaction train and its liquefied petroleum gas plant at Punta Europa.

Existing production and processing facilities at the Alen platform and at Punta Europa require only minor modifications to produce and process this gas, which to date has been reinjected because Noble's focus has been on exploiting liquids.

The agreement contemplates construction of a 65-kilometre pipeline that will transport gas from Alen to Punta Europa and which will be designed to handle production from multiple fields.

Sanction of the project is contingent upon final commercial agreements being executed.

The 3.7 million tonnes per annum EG LNG facility is currently fed by gas from Marathon's Alba field, north of Bioko Island, but with production falling, Alen gas offers a back-fill opportunity.

Equatorial Guinea's Petroleum Minister Gabriel Mbaga Obiang Lima said that concluding a project — originally called 3G — "has taken longer than expected, but the good thing is that as Alba production is declining, associated gas from blocks I and O will go to Punta Europa".

He added: "I would expect by 2020 to have first LNG exports from that field."

Obiang Lima hopes the Noble deal will be the first of a new wave of agreements that will see gas sent to Punta Europa and which could even support another liquefaction train.

"If enough gas is found it could underpin a second train," he remarked.

Alen, which straddles blocks O and I, came on stream in 2013.

Future projects could see associated gas piped to the facilities from Noble's Aseng field in Block I, ExxonMobil's Zafiro field north of Bioko, additional Marathon-operated gas finds as well as Cameroon and Nigeria.

Presently, Shell is the sole offtaker of EG LNG production but Obiang Lima said that could change once Alen gas starts flowing because "we're inviting different companies (to talk) about buying the backfill LNG".

Noble’s head of operations Gary Willingham said: “This project will transform the Alen platform into a hub for potential development of additional gas fields nearby."

Noble estimates the project could result in the recovery of an extra 600 billion cubic feet of gas equivalent resources from Alen.

Marathon and Noble are partners in both the Alba gas field off Bioko Island, which currently provides all the gas for the EG LNG plant, and the onshore Alba plant.

State-owned players GePetrol and Sonagas are the respective local partners in these assets.

The shareholders in EG LNG are Marathon, Sonagas, Mitsui and Marubeni.

The Equatorial Guinea government wants Punta Europa to develop into a regional mega-gas hub and is keen to develop local content and jobs as the site expands.

Obiang Lima said the proposed mega-hub will “change the dynamic of future upstream gas projects in Equatorial Guinea by promoting gas exploration and establishing Punta Europa as the onshore base and primary user for new gas projects”.

His government, working with Johannesburg-based law firm Centurion, has also been promoting the LNG2Africa initiative which aims to develop intra-Africa gas sales deals.

To this end, Equatorial Guinea has signed tentative deals with Ghana and Burkina Faso.

“Feasibility studies for regasification and LNG storage terminals are already under way with both countries,” said Centurion chief executive NJ Ayuk.

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