Page 7 - GLNG Week 41 2021

GLNG COMMENTARY GLNG

as they have been doing since 2018. Gas output gearing up to formulate a new Hydrocarbon
is “expected to decline going forward,” he said. Law for the country. During his presentation,
Moreover, Thomson said, Equatorial Guinea the minister said that Malabo wanted to reward
does not appear to be heading for a wave of new companies that helped to develop gas fields and
discoveries. The country is not slated to bring other upstream assets.
more undeveloped sites online any time soon “This is no time to stop and be comfortable. In
and shows “little sign of appetite for full green- the era of energy transition and stiff competition
field developments,” he commented. for capital, it is important to be pragmatic and
Additionally, he also raised questions about have a hydrocarbon law that deals with today’s
the efficacy and long-term impact of the Alen realities and incentivises growth,” Lima com-
scheme. “A further phase of the Alen gas project mented. “We have to be more competitive, cut
is believed to be progressing, but its scope and red tape, promote free markets, balance local
timeframe is unclear,” he told NewsBase. content, create more jobs and increase our tax
(He did not elaborate, but it’s worth noting base.”
that his statements are in line with suggestions
from IHS Markit that paint Alen as more of a Second-phase hurdles
stopgap than a solution. According to the con- But even if these challenges can be overcome,
sultancy, the gas project may “help maintain the second phase of Equatorial Guinea’s MGH The gas project
feedstock to the EG LNG facility until the mid- project will also face steep challenges.
2020s, but longer-term supply stability is still According to Thomson, the hurdles may be may “help
uncertain.” legal, logistical or diplomatic. “Potentially, we maintain
will see stranded Nigerian and Cameroonian
New gas streams gas fields developed as part of the hub. Yolanda feedstock to
Presumably Malabo could help reduce the level in Cameroon is a prime candidate,” he told
of uncertainty by taking steps to encourage NewsBase. “But cross-border agreements are the EG LNG
investment in upstream gas exploration and tricky, and Nigeria is also facing supply pres-
development. sures for its NLNG [Nigeria LNG] project and facility until the
For his part, Thomson believes that Malabo its own domestic market.” mid-2020s”.
does recognise the importance of securing new It’s not yet clear whether Equatorial Guinea
sources of gas production, even if it is working is ready to work to achieve this goal. If it does,
slowly. He told NewsBase that Equatoguinean though – and if it succeeds – it may just be able
authorities were “working on gas incentives to sell its neighbours on its vision of a regional
as part of its mega-hub plan, and these are gas trading hub that uses tie-backs and pipe-
expected in 2022,” he said. “The changes will be lines to connect local and nearby fields to facil-
focused on helping to backfill supply to Punta ities in Punta Europa rather than relying on
Europa.” floating production, storage and off-loading
His statements may be a reference to Lima’s (FPSOs). “Utilising existing infrastructure has
announcement during the webinar last month cost and time advantages over deploying new
that Equatorial Guinea’s government was kit,” he commented.™

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