AMEC Signs Heads of Agreement with Afgas
AMEC has entered into a heads of agreement with the African Gas Development Corporation (Afgas) as the basis of a strategic alliance to design, procure, build and operate the infrastructure and facilities for various gas monetization projects to be undertaken by a newly formed joint venture (JV) between Afgas and Sonagas in West Africa.
The Afgas-Sonagas JV will work to bring to market gas supplies in Equatorial Guinea, Nigeria and Cameroon in order to process, market and supply liquefied natural gas (LNG) and other gas products through LNG facilities in Equatorial Guinea. Under the terms of the JV, Afgas will be responsible for providing all required subsea pipelines and related infrastructure for the joint venture projects and to achieve this has entered into the heads of agreement with AMEC and, separately, Acergy (formerly Stolt Offshore).
Ethelbert Cooper, Chief Executive of Afgas commented: "We are pleased to have reached agreement with Sonagas to establish an exclusive joint venture to develop gas projects together in the Gulf of Guinea. Now that we have signed a heads of agreement with each of Acergy and AMEC, we have two world class strategic partners on our team making us well placed to move on rapidly with the development of our joint venture projects.
"The Gulf of Guinea has gas reserves of approximately 200 trillion cubic feet (TCF), with more than eighty percent of those reserves being situated in Nigeria; therefore Equatorial Guinea is ideally placed to be one of the leading regional gas processing centers for West Africa. The establishment of our joint venture will enable us to fast track our projects and respond to the growing competition for access to LNG from the Gulf of Guinea. We believe that we have assembled a cohesive strategic approach to the development of LNG and gas in West Africa through our partnerships and alliances-the exclusive JV with Sonagas which already has a significant stake in an expanding LNG platform, with Gasol whose strategy is focused on LNG opportunities through its stake in African LNG, with Afren as strategic gas supplier, and finally with two industry leaders-Acergy and AMEC-in the design, implementation and operation of major gas projects."
Sr. D. Juan Antonio Ndong Ondo, Director General of Sonagas, commented: "The establishment of our joint venture with Afgas is a significant step in our strategy to eliminate gas flaring, create assets for the joint venture in which The Republic of Equatorial Guinea will share ownership and management, and build the institutional capabilities of Sonagas. Our joint venture is progressing a number of projects as part of the continued development of Equatorial Guinea as a gas processing hub for the region".
Afgas and African LNG Holdings
African Gas Development Corporation ("Afgas") is engaged in the development, construction, operation and ownership of integrated gas developments in Africa. Afgas is the largest shareholder in Gasol plc which is a London (AIM:GAS) listed downstream gas development company focusing on opportunities in Africa and the Gulf of Guinea in particular. Gasol purchased 20% of Afgas's subsidiary, African LNG Holdings ("African LNG"), earlier this year to integrate and build on the group's gas and LNG strategy in West Africa of which the JV with Sonagas is a critical first step. Afgas was founded by Dr Rilwanu Lukman and Mr Ethelbert Cooper, both founders of Afren plc, a London listed (AIM:AFR) Africa focused E&P company. Dr Lukman was the longest serving president and secretary general of OPEC, former Nigerian minister of petroleum resources, presidential adviser and co-founder of Afren plc. Mr Cooper is a veteran developer of African natural resources projects and co founder of Afren plc. Afren owns approximately 6.5% of Gasol and has a strategic relationship governing the supply of gas to Afgas-Gasol.
Sonagas, GE ("Sonagas"), is the national gas company of the Republic of Equatorial Guinea which has responsibility for all existing and future gas related projects in the country. Sonagas' existing gas projects include participation in the Bioko Methanol Plant which currently produces [20,000] barrels per day, the Punta Europa liquefied petroleum gas plant which currently produces [20,000] barrels per day and a 25% stake in the 3.8 million tonne Equatorial Guinea liquefied natural gas plant ("EGLNG") which will begin deliveries of LNG to international markets from mid-2007.
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