Equatorial Guinea Launches LNG Project

IBADAN, Nigeria, Oct. 18, 2007 (Dow Jones Newswire)

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%

Copyright (c) 2007 Dow Jones & Company, Inc.