Having signed an MoU for Nigerian offshore resources to be processed at Equatorial Guinea’s Punta Europa facility, the Chamber is urging both Ministers to ensure rapid implementation in order to position west Africa as a leading gas economy.
The African Energy Chamber (AEC), as the leading voice for the African energy sector, commends Nigeria and Equatorial Guinea for the signing of the landmark Memorandum of Understanding (MoU) at the fifth edition of the Nigeria International Energy Summit 2022, urging both H.E. Chief Timipre Sylva, Minister of State of Petroleum Resources, Nigeria, and H.E. Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbon, Equatorial Guinea, to ensure the rapid implementation of the deal.
The MoU, which will see Nigeria supplying gas from offshore fields to Equatorial Guinea’s gas processing facility at Punta Europa, marks a critical step in west Africa’s journey towards gas monetization and utilization, while ushering in a new era of regional collaboration that other African stakeholders can learn from. Backed by Nigeria’s ‘Decade of Gas’ initiative – which aims to transform the country into a gas economy through the development of sizeable gas-based projects – and made feasible through the recently implemented Petroleum Industry Act (PIA), the MoU integrates Nigeria’s sizeable offshore gas reserves with Equatorial Guinea’s world class gas processing and liquefaction infrastructure.
For Nigeria, the PIA – which streamlines industry processes and offers attractive investment opportunities – in conjunction with the Decade of Gas initiative, has not only created an enabling environment for projects such as this to take off, but has made a strong case for the role of Nigerian gas in regional markets. The MoU allows for the monetization of Nigeria’s resources, paving the way for enhanced economic and energy sector growth.
For Equatorial Guinea, the MoU represents a critical step in the country’s journey to become both a regional and global gas hub. As the country moves to accelerate the development of its Gas Mega Hub (GMH) – a diverse project designed to harness unexploited offshore domestic and regional gas resources -, regional resources such as those in Nigeria will be critical for the successful development and overall success of the GMH. The MoU expands regional gas commercialization opportunities while consolidating Equatorial Guinea’s position as a strong and sustainable gas economy.
“The Chamber is urging both Ministers to ensure the rapid implementation of the deal, recognizing the role this deal will play in positioning west Africa as a global gas hub. Nigeria’s resources, coupled with Equatorial Guinea’s infrastructure and processing facilities, will enable gas to be commercialized, resources maximized, and new investment opportunities clarified in west Africa,” stated NJ Ayuk, Executive Chairman of the AEC.
Meanwhile, the MoU will further position west Africa as an integrated energy sector. While serving as an example of the role joint collaboration and regional cooperation plays in Africa’s energy sector expansion, the MoU goes one step further to position west Africa at the forefront of Africa’s energy transition. With gas playing an increasingly important role in the transition to a clean energy future, both regionally and globally, the MoU will significantly advance gas utilization across the west African market, triggering a new wave of clean energy investment and development.
In the 2022 global energy context, this deal becomes increasingly more important. Europe’s energy crisis coupled with supply disruptions owing to the Russia-Ukraine conflict has not only caused demand to skyrocket, but opened up new opportunities for African gas producers. In this regard, it has become vital for deals such as this to be implemented quickly if Africa is to emerge as the preferred supplier to Europe and other international markets. Accordingly, the AEC calls for cross-border gas projects such as this to be fast-tracked, with countries building on progressive regulation such as the PIA and Equatorial Guinea’s new Hydrocarbon Code while removing barriers to investment and development.
“In order to ensure optimal implementation and project success, the Chamber is urging Ministers to cut red tape, ensure productive processes drive development, while enabling the private sector to play a leading role in project implementation. The world needs gas, and Africa can supply it. Deals such as this will be critical, both for the continent and for the world. The Chamber is also calling for the signing of definitive agreements with Marathon, Chevron, Sonagas, as well as other key Equatorial Guinean LNG partners either or before the continent’s premier energy event, African Energy Week 2022, so that west African progress can be accelerated in 2022 and beyond,” continued Ayuk.