CI-NEWS

British VOG moving towards signing gas supply contract in SW.

2020-02-11

No: 470

British VOG moving towards signing gas supply contract in SW.

Bowleven, a British oil and gas operator, co-owner at 25% of the exploration license on the Etinde field, in the Cameroonian offshore, announced on February 5, 2020 the signing of a "letter of non-binding intention” between his compatriots New Age (who controls 37.5% of the Etinde license, in the same way as the Russian Lukoil) and Victoria Oil & Gas Plc (VOG).

This letter, in force until March 31, 2021 at the latest, we officially learned, is preparatory to the conclusion of a final contract for the supply of gas from the Etinde block, with an area of ??2,316 km 2 , in the South West region of Cameroon.

Concretely, explains Bowleven, "the letter of intent provides that New Age will supply treated gas to Gaz du Cameroun SA (GDC), a wholly-owned subsidiary of VOG ". These deliveries will be made to Limbé, a tourist town in the South-West region of Cameroon which also houses the only oil refinery in Cameroon (Sonara). GDC will then transport the gas to Douala, the Cameroonian economic capital, where the company has a natural gas processing unit.

In the event of a definitive agreement, the contract between VOG and New Age will have a duration of 20 years, from its date of signature, and will require New Age to supply a minimum of 25 mmscf of gas per day to GDC, during the first three years. The quantities will then be brought to a minimum of 30 mmscf of gas per day.

Additional research

"As we strive to make a final investment decision on Etinde this year, today's announcement by VOG is a positive step toward reconfirming the commercialization of the license," said Eli Chahin, CEO of Bowleven.

Indeed, the contract that VOG and New Age could conclude for the supply of gas to the Etinde block is conditioned by the results of additional research expected this year. These, we learn, aim to indicate the true potential of this gas field, before making an investment decision on the part of the owners of the license.

All the more so since the last exploration campaign conducted on this permit in 2019 was not successful, as Eli Chahin revealed to the Petroleum Economist, a specialized publication of Oil & gas. These drilling operations were however supposed to reveal enormous gas deposits, in view of the preliminary results.

But in spite of these not very promising results, and while waiting for the complementary works, Cameroon puts a lot of hope in the gas exploitation project on the Etinde block, to better benefit from the boom of the market of liquefied natural gas. This project does not exclude the possibility of installing a second natural gas liquefaction unit in the Southwest region, after that of Kribi, in the South region.

A PHP Error was encountered

A PHP Error was encountered

British VOG moving towards signing gas supply contract in SW.