BG Group & Marathon Sign LoU for LNG Supply
BG Gas Marketing Ltd has signed a Letter of Understanding (LoU) with Marathon Offshore Alpha Limited, a wholly-owned subsidiary of Marathon Oil Corporation, for long-term Liquefied Natural Gas (LNG) supply to BGML.
The LoU envisages the supply of 3.4 million tons per annum (mtpa) for a period of 17 years beginning in 2007 from a proposed LNG project to be developed by Marathon and its partners on Bioko Island, Equatorial Guinea. Feedstock gas for the project would be sourced primarily from the Marathon-operated offshore Alba Field, in which it has a 65 percent interest. Approval of the LNG project by the Government of Equatorial Guinea is pending.
A definitive LNG Sale and Purchase Agreement is expected to be concluded by year-end 2003.
Frank Chapman, Chief Executive, BG Group plc, said: "We are delighted to announce significant progress in our rapidly developing LNG strategy. The Lake Charles import terminal in Louisiana is the principal market for this LNG but this agreement provides total flexibility on the destination of the gas, enabling BG Group to take advantage of prevailing market conditions at import destinations around the world. This agreement represents a further major step in building up our portfolio of long-term competitively priced LNG."
Commenting on the announcement, Clarence P. Cazalot, Jr., Marathon President and CEO, said: "This agreement with BG Group marks the achievement of another important milestone in the commercialization of the significant natural gas reserves in Equatorial Guinea. LNG from West Africa promises to play an increasingly important role in meeting the growing energy demands of the United States and we are pleased to be working with all our LNG project partners to help meet this need for clean, efficient energy. This project is one more example of how Marathon is executing its integrated gas strategy, which is aimed at linking the world's stranded natural gas resources with key demand centers for this premium energy source."
Domingo Mba Esono, the National Director of GEPetrol, commented: "GEPetrol is very pleased to be actively participating in this important development for Equatorial Guinea. This LNG project demonstrates international investor confidence in the political stability and economic progress of our country. GEPetrol has chosen to be an active partner and investor in the LNG project because we are confident it will bring commercial and social benefits to Equatorial Guinea."
Marathon signed the agreement on behalf of its LNG project partner, GEPetrol, Equatorial Guinea's State owned oil company.