Bloomberg News

Equatorial Guinea to Spend $4 Billion on New LNG Plant

June 29, 2011

(Adds timing of interview in second paragraph.)

June 29 (Bloomberg) -- Equatorial Guinea will build a second liquefied natural gas plant at a cost of $4 billion to double LNG output, the head of the state-owned gas company said.

“Definitely, there’ll be a second plant,” said Juan Antonio Ndong Ondo, director general of Sociedad Nacional de Gas, or Sonagas, in a June 27 interview. “We’ve had some new discoveries so we can go ahead with it. In principle we can double our current production.”

The West African nation’s second LNG plant, or train, will produce 1.8 billion to 4.6 billion cubic feet a day, Ndong said in the capital of Malabo. Capacity will depend upon discovered reserves early next year when Sonagas and partners Noble Energy Inc. and Ophir Energy Plc decide on the investment.

Equatorial Guinea, tucked into the Gulf of Guinea, currently produces 3.4 billion cubic feet of LNG a day. The second plant may start producing by 2016, Ndong said. The nation has about 8.5 trillion cubic feet of proved natural-gas reserves, according to Sonagas.

Oil and gas prices will continue to rise as countries switch back toward fossil fuels after the nuclear disaster in Japan this year, Ndong said. “We believe prices will be very positive for us in the future,” he said.

Nigeria and Cameroon are considering ways of transferring gas to their smaller neighbor, further allowing it to ramp up production, the director general said.

“There are initiatives to collaborate in the collection of gas that’s being burnt,” he said. “We won’t depend on them though, we’ll see what our own reserves are first.”

Sonagas is also currently considering a petrochemicals plant, Ndong said.

--Editors: Stephen Cunningham, Will Kennedy.

To contact the reporter on this story: Franz Wild in Malabo at fwild@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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