The MoU also calls for Equatorial Guinea to explore and produce oil and gas in Burkina Faso…
Competition is heightening in LNG market as Equatorial Guinea has signed sales and infrastructure agreement with Burkina Faso, Nigeria’s West African neighbor.
According to a release distributed by APO, Equatorial Guinea’s ministry of mines and hydrocarbons signed a memorandum of understanding with the government of Burkina Faso to supply the West African country with LNG and build critical infrastructure to import, store and transport gas.
The initial three-year agreement compels both sides to negotiate and sign LNG sales and purchase agreement (SPA) and a terminal use agreement (TUA) that will be the basis for their first LNG exchange. The MoU also calls for Equatorial Guinea to explore and produce oil and gas in Burkina Faso.
“We are very pleased to strike this agreement and be given the opportunity to supply our African brothers in Burkina Faso with crucial gas resources,” said H.E. Gabriel Mbaga Obiang Lima, minister of mines and hydrocarbons of Equatorial Guinea.
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“This collaboration with Burkina Faso, part of our LNG 2 Africa initiative, highlights the important responsibility of African countries to cooperate in the energy sector and build the necessary infrastructure to strengthen our economies.”
As part of the agreement, both sides will commission a technical study for the construction of regasification and LNG storage terminals and will exchange knowledge and data. They will also work to build regasification and storage terminals in Burkina Faso and transport infrastructure, either by pipeline or LNG carrier.
Equatorial Guinea is one of Africa’s biggest LNG producers, exporting 3.4 million tonnes per annum of LNG to destinations worldwide. It is committed to significantly expanding its export capacity through the 2.2 million tonnes per annum Fortuna FLNG project, which is on track to reach final investment decision by the end of the year. When it goes online in 2020, Fortuna will be Africa’s first deepwater FLNG project.
In May, Equatorial Guinea entered into a binding agreement with the OneLNG joint venture to explore the liquefaction and commercialization of natural gas in offshore blocks O and I. Bringing online new LNG volumes will enable Equatorial Guinea to sell gas to higher priced markets in Africa and beyond while retaining a share in profits for onward marketing.