UNCTAD- FORUM, Nairobi,

May 23th – 25nd, 2007

Juan Antonio NDONG ONDOGeneral Director SONAGAS G.E.

GAS AND PETROCHEMICALGAS AND PETROCHEMICAL

INDUSTRY IN EQUATORIAL GUINEAINDUSTRY IN EQUATORIAL GUINEA

NOT AN OFFICIAL UNCTAD RECORD

AgendaAgenda Introduction

Development of Gas Industry in Equatorial Guinea

Ongoing Gas Activities: Methanol, LPG and LNG Production and Exportation

Natural Gas Exploitation Opportunities: Gas Gathering in the Gulf of Guinea

Petrochemical development opportunity

SONAGAS: Roll and Objectives,

Participation Projects

Social Projects Participation

Conclusions

IntroductionIntroductionWith the initial production of national hydrocarbons, since 1991-1992, all related activities has constantly increased with the results of first produced products derived from: Condensate Gas, LPG mixed, methanol and others. The production diversification for the expansion of gas market in the country, is the current role of EG Government, planning in projects, such as the development of petrochemical industry.

The creation of values over regional gas, is another key role of the Government of Equatorial Guinea, on its project to gather the excess gas being flared in neighboring countries, by a pipeline system to the processing hub to be constructed in EG.

Development of gas industry in E.G.Development of gas industry in E.G.• Proved existing Gas reserves in Equatorial

Guinea are estimated at approximately 8.5 TCF ,

• Alba Field (the main producing gas field), provides the foundation for world – Class Gas processing business.

GAS ACTIVITIES:

ProductionProductionLiquefied Petroleum Gas (LPG): Liquefied Petroleum Gas (LPG): 20,000 BOE/D 20,000 BOE/D

Methanol: Methanol: 20,000 BOE/D20,000 BOE/D

LNG by 2007: LNG by 2007: 75,000 BOE/D75,000 BOE/D

Gas utilization in power generation Gas utilization in power generation (Current daily consumption: 5.3 (Current daily consumption: 5.3 MMSCF/d).MMSCF/d).

New Opportunities: Gas New Opportunities: Gas Gathering in the Gulf of GuineaGathering in the Gulf of Guinea

– Maximise monetisation of West African

stranded gas,

– Excess gas within critical market window

– E.G. to build of an integrated local and E.G. to build of an integrated local and

regional processing industry for lean gas, regional processing industry for lean gas,

LNG, LPG and other liquids,LNG, LPG and other liquids,

– E.G. to become the gas processing hub E.G. to become the gas processing hub

for the entire Gulf of Guinea region.for the entire Gulf of Guinea region.

Purposes

Petrochemical DevelopmentPetrochemical Development OpportunityOpportunity

RELATED INDUSTRIESRELATED INDUSTRIES• Further development of methanol processing and export Further development of methanol processing and export

facilitiesfacilities• Fertilizer production and exportsFertilizer production and exports• Polypropylene production and exportsPolypropylene production and exportsLPG DISTRIBUTIONLPG DISTRIBUTION• Much potential exists to develop the market for LPG (as an Much potential exists to develop the market for LPG (as an

efficient, economical, clean burning source of energy) efficient, economical, clean burning source of energy) along the west coast of Africa, where consumption rates along the west coast of Africa, where consumption rates lag considerably behind those in other gas-rich areas of the lag considerably behind those in other gas-rich areas of the world world

National Gas Monetization National Gas Monetization

On stream May 2001

Capacity 1 MM tons per year

3% of 33 MM ton global market

Primary markets—US & Europe

One of the world’s largest and lowest cost methanol producers

Methanol Methanol (Atlantic Methanol Production)(Atlantic Methanol Production)

National Gas Monetization National Gas Monetization

LPG:LPG:

• On On stream since 1991 (Mixed product). stream since 1991 (Mixed product).

• Upgraded 2003 - 2005; cost 360 mm US $. Upgraded 2003 - 2005; cost 360 mm US $.

• Main processing product: Wet Gas Main processing product: Wet Gas -- Butane ………………….. 8,000 Bbls/dButane ………………….. 8,000 Bbls/d-- Propane ………………… 14,000 Bbls/dPropane ………………… 14,000 Bbls/d- Secondary Condensate ….6,600Bbls/dSecondary Condensate ….6,600Bbls/d

• Primary markets: US and EuropePrimary markets: US and Europe

National Gas MonetizationNational Gas Monetization

• $$1.4 billion EPC project1.4 billion EPC project• 3.4 MTPA capacity—17 year offtake agreement with BG 3.4 MTPA capacity—17 year offtake agreement with BG

Group PLC Group PLC • First equity energy investment by SONAGASFirst equity energy investment by SONAGAS• First shipment starting on May 23-25 2007First shipment starting on May 23-25 2007• Catalyst for regional gas hubCatalyst for regional gas hub

• Gas Supply Gas Supply

– ~600 million cubic feet per day purchased from the Alba field~600 million cubic feet per day purchased from the Alba field

• Plant Capacity Plant Capacity

– Nameplate 3.72 million tons of LNG per annum (mtpa) Nameplate 3.72 million tons of LNG per annum (mtpa)

• LNG Storage LNG Storage

– 2 x 136,0002 x 136,000mm3 insulated tanks3 insulated tanks20

Marine Operating Platform

Loading Platform

MD6

MD5

BD3

LNGLNG

SONAGAS G.E.SONAGAS G.E.

• SONAGAS G.E., is the National Gas Company. SONAGAS G.E., is the National Gas Company.

• It is the state’s representative in all activities related to the It is the state’s representative in all activities related to the development of natural gas resources.development of natural gas resources.

• SONAGAS G.E. is responsible for the diversification of gas as SONAGAS G.E. is responsible for the diversification of gas as an energy base and for the diversification of revenues derived an energy base and for the diversification of revenues derived from gas utilization.from gas utilization.

• It promotes opportunities for the development of gas projects It promotes opportunities for the development of gas projects throughout the country, but is also allowed to participate in throughout the country, but is also allowed to participate in projects outside of Equatorial Guineaprojects outside of Equatorial Guinea

Company objectivesCompany objectives• Designs, creates and operates, as well as continuously Designs, creates and operates, as well as continuously

evaluates any general processing, marketing, treatment and evaluates any general processing, marketing, treatment and gas utilization programs in the Republic of Equatorial gas utilization programs in the Republic of Equatorial Guinea,Guinea,

• Serves as an agent of the Government in order to revert to Serves as an agent of the Government in order to revert to the state any benefits obtained from gas marketing and the state any benefits obtained from gas marketing and processing,processing,

• Undertakes, either individually or outside the national Undertakes, either individually or outside the national territory, any relevant activities by nature and especially territory, any relevant activities by nature and especially any gas processing, marketing and refining activities.any gas processing, marketing and refining activities.

Projects ParticipationProjects Participation

PARTNERS AND INTEREST:PARTNERS AND INTEREST:-- MARATHON E.G.: 40%MARATHON E.G.: 40%-- NOBLE E.G.: 40%NOBLE E.G.: 40%-- SONAGAS G.E.: 20%SONAGAS G.E.: 20%

20,000 BOE/DGross

LPG ProductionLPG Production

PARTNERS AND INTEREST:PARTNERS AND INTEREST:

- MARATHON E.G.: 45%- MARATHON E.G.: 45%

- NOBLE E.G.: 45% - NOBLE E.G.: 45%

- SONAGAS G.E.: 10%- SONAGAS G.E.: 10%

20,000 BOE/D

Gross

Methanol ProductionMethanol Production

PARTNERS AND INTEREST:PARTNERS AND INTEREST:-- MARATHON E.G.: 60%MARATHON E.G.: 60%

-- SONAGAS G.E.: 25%SONAGAS G.E.: 25%

-- MITSUI: 8.5%MITSUI: 8.5%

-- MARUBENI: 6.5%MARUBENI: 6.5%

75,000 BOE/D

Gross

LNG Train 1LNG Train 1

COMMUNITY PROJECTS COMMUNITY PROJECTS PARTICIPATIONPARTICIPATION

• Malaria Reduction in Bioko Island (More than $5 Million investment)

CONCLUSIONSCONCLUSIONS

1.1. There is an existing infrastructure for gas transformation in E.G.,There is an existing infrastructure for gas transformation in E.G.,

2.2. There are several opportunities to invest in the E.G. hydrocarbons There are several opportunities to invest in the E.G. hydrocarbons gaseous sector;gaseous sector;

Vision for the future of west african countries to be involved in the E.G. Gas Gathering Project is focused on: Commercializing stranded gas reserves; Reduce flaring; Promoting Natural Gas Exploitation and Development