U.S. operators – including Noble Energy, Marathon Oil and Chevron – have played a critical role in executing the first phase of Equatorial Guinea's flagship Gas Mega Hub, serving as a model for future U.S. investment in gas value chains across the continent.
The African natural gas value chain has become the preferred destination for foreign direct investment – not only because the continent holds over 500 trillion cubic feet of proven reserves, but also because natural gas is a critical step in the global energy transition and provision of clean, affordable power. In the U.S., the Biden Administration has made clear its commitment to supporting developing countries in their own pursuit of low- or zero-carbon economies. Home to 1.3 trillion cubic feet of natural gas, Equatorial Guinea exemplifies the impact of U.S. private investment on its domestic gas monetization drive to date, as well as the myriad opportunities still available to U.S. investors and suppliers within Africa's fast-growing gas market.
Since the entry of ExxonMobil in 1994 and its subsequent discovery of the prolific Zafiro field, U.S. operators have played a major role in Equatorial Guinea's hydrocarbons development. In fact, the U.S. represents the single largest foreign investor in Equatorial Guinea, which the country acknowledges through exclusive privileges like visa-free travel for Americans. Since then, oil and gas independents like Marathon Oil and Kosmos Energy have entered the upstream space, along with supermajor Chevron via its acquisition of Noble Energy last October. In partnership with the Ministry of Mines and Hydrocarbons, these companies have directly financed and developed Equatorial Guinea's flagship Gas Mega Hub project, which targets the creation of an intra-African liquefied natural gas (LNG) trade through the development of several offshore gas hubs and monetization of neighboring gas reserves.
The first phase of the Gas Mega Hub was the successful completion of the $330-million Alen gas monetization project, which supplies gas from the Noble Energy-operated Alen Field to onshore gas-processing facilities at Punta Europa on Bioko Island. In April 2019, Noble Energy signed definitive agreements with Marathon Oil and the Government of Equatorial Guinea for tolling Alen Unit gas through the Alba LPG plant and EG LNG production facility, in which Marathon Oil is a majority shareholder. In February, Chevron, as the new operator of the Alen Unit, achieved first gas flow from the project, with new companies set to lift LNG cargoes directly from the EG LNG plant this year.
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