Business Hilights

Tracking Nigeria's Headline Business News Online

Energy Industry

E’Guinea to convert Methanol Plant to Modular Refinery

Ad 2
Ad 3

…As Nigeria gets first modular refinery April next year

A feasibility study is underway on the potential to convert Equatorial Guinea’s methanol plant at Punta Europa; The Ministry of Mines and Hydrocarbons is dissatisfied by declining gas production and expects new investment to upgrade Punta Europa facilities

Besides, barring any last minute hitch, the first modular refinery in Nigeria expected to produce 5,000 per day of refined petroleum products will become operational by April 2020. Business Hilights recalls that the ground-breaking ceremony of the refinery was performed on Thursday, October 04, 2018 at the Ibigwe Flow station of Waltersmith Refining and Petrochemical Company Limited.

The project is being partnered by the Nigerian Content Development and Monitoring Board (NCDMB) with 30 per cent equity and financed by the African Finance Corporation with an 18 month completion period.

Speaking on the occasion, Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, expressed the commitment of the board in making sure that the project was completed on schedule.

However, on the Equatorial Guinea’s conversion plan, the Ministry of Mines and Hydrocarbons (MMH) is already ordering the dismantling of the methanol plant owned by the Atlantic Methanol Production Company LLC (AMPCO) at the Punta Europa Gas Complex on Bioko Island, calling instead for a modular refinery.

This move notably echoes the Ministry’s discontent over Marathon Oil’s work program and budget when it comes to exploration and production on their current acreage in the country, which do not reflect the expected level of investment and commitment for key assets such as the Alba offshore field and the methanol plant, which the American company operates.

Minister of Mines and Hydrocarbons, Gabriel Mbaga Obiang Lima, said “The Punta Europa complex is the crown jewel in Equatorial Guinea’s gas processing infrastructure and is central to our long-term plans for gas monetization. However, due to a lack of investment in the Alba field and the methanol plant, a modular refinery would be a more productive project for that space.”

The Ministry of Mines and Hydrocarbons of Equatorial Guinea has commissioned a feasibility study to convert the methanol plant at Punta Europa. The methanol plant is a component of the larger Punta Europa gas processing facility owned by Marathon Oil and its partners. Marathon Oil Company holds 45 percent shares in the methanol plant.

As part of the country’s new Gas Mega Hub project — which aims to provide additional gas supply to processing facilities both onshore and offshore — new investment in the Punta Europa complex is needed. The plant is currently supplied by Marathon Oil’s Alba field, which has seen declining production. The first phase of the gas mega hub project is to implement a new gas supply agreement signed between the MMH and Noble Energy, operator of the Aseng and Alen fields in Block I/O. Gas will be supplied to the Punta Europa gas complex, which includes the Malabo power station, AMPCO methanol plant and the Equatorial Guinea LNG plant. The agreement, combined with new subsea pipelines linking the Aseng, Alen and Alba fields, will replace some of the gas production lost as the Alba field declines.

Even as the Alba field declines, however, Noble Energy, Kosmos Energy and Trident Energy have made major discoveries after an aggressive 2019 work program.

Noble Energy made a discovery in the offshore Block I in August 2019, when the Aseng 6P well was drilled to a total depth of 4,417 meters. Kosmos Energy and Trident Energy struck oil in November, making a discovery when the S-5 well was drilled at a total depth of 4,400 meters and encountered 39 meters of net oil play in the Santonian reservoir, in the offshore Rio Muni Basin. The discovery was the first well drilled in Kosmos’ infrastructure-led exploration (ILX) in offshore Equatorial Guinea. The drilling of the S-5 well was accelerated following exciting 3D seismic acquired in 2018.

“New investment is what is needed to continue to drive Equatorial Guinea forward. We are very pleased to be working with companies like Noble Energy, Kosmos Energy and Trident Energy, which remain committed to strong work programs and new opportunities for growth,” the Minister said.

Already, an expected direct investment of a minimum of $1.4 billion — a firm $1.2 billion and a contingent forecast of $273 million predicted for 2020 — is associated with the drilling of two wells and the continuous development of six existing wells in Equatorial Guinea in 2020.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.