Juan Antonio Ndong Ondo, Director General of the national gas company of Equatorial Guinea, SONAGAS, spoke to Energy Capital & Power (ECP) about how the company is prioritizing the diversification of gas sources that feed into the Punta Europa Gas Complex, with a view to guaranteeing current production and transforming the country into a regional gas production hub.
WHAT ROLE DOES SONAGAS PLAY IN ENSURING THE SUSTAINABLE PRODUCTION OF NATURAL GAS IN EQUATORIAL GUINEA?
SONAGAS is the national gas company that owns all of the natural gas assets and manages all affairs relating to gas in Equatorial Guinea. Our role is based on the government decree that created SONAGAS, as well as on Equatorial Guinea’s Hydrocarbons Law. Our responsibility is to ensure that all gas activity carried out in Equatorial Guinea proceeds to plan and that Equatorial Guinea and its partners are guaranteed a win-win situation, in which business is carried out safely, diligently and responsibly. The objective of creating SONAGAS was to maximize the profitability of hydrocarbons production in Equatorial Guinea. As production of Liquefied Petroleum Gas (LPG) ramped up and developed, the country began to produce methanol and Liquefied Natural Gas (LNG), both of which are by-products of gas extraction. Our goal is to strive towards more diversified sources of income to move into more areas of business and start new activities. For now, we are somewhat limited in what is being produced. If more gas were to be found, then we could continue to diversify. We are hoping, for example, to establish petrochemical plants.
FOLLOWING THE PRODUCTION OF FIRST GAS FROM THE ALEN BACKFILL PROJECT LAST FEBRUARY, ARE SIMILAR PLANS UNDERWAY AT OTHER DEVELOPMENT BLOCKS?
We have achieved, together with the Ministry of Mines and Hydrocarbons, an increase in production using “backfill” or resources from other sources of gas besides the Alba field. The Alba field supplies the main sources of gas and allows for the production of methanol, LNG and LPG. The idea is to utilize other blocks that can feed activities at the Punta Europa gas-processing facilities. This has almost been achieved, but we are currently looking at other mechanisms to ensure that there is always continuity with Punta Europa, and if possible, to reach greater diversification.
AS THE COUNTRY EMBARKS ON AN AMBITIOUS DOWNSTREAM DIVERSIFICATION DRIVE, WHAT IS THE POTENTIAL FOR A GAS-BASED PETROCHEMICALS INDUSTRY IN EQUATORIAL GUINEA?
In terms of methanol, work is in progress. Historically, the main market for methanol has been the U.S., but recently, there has been variation and Equatorial Guinea is in a position to export methanol to Europe. In addition, we are exploring new markets on the continent, as the demand in certain African countries is increasing. Africa is evolving more and more. As for petrochemicals, they can be developed from methanol or natural gas. Since all the methanol being produced is currently going to market, there is no surplus, so we consider it more advantageous to sell it. Now, on the assumption that there is no market, it is compulsory to make provisions for the diversification of methanol in petrochemicals at the country level. But for now, everything produced is finding a market.
HOW WOULD YOU EVALUATE GROWTH PROSPECTS FOR THE USE OF LPG AND CNG IN EQUATORIAL GUINEA’S TRANSPORTATION SECTOR?
The Government of Equatorial Guinea has already taken its first step toward establishing a facility that uses natural gas at the vehicular level. But these facilities are located on Bioko Island and we suspect that it is not very profitable, as the Island has around 60-70 kilometers of shoreline. We are also evaluating an alternative to CNG via the use of LPG at the vehicle level. We think that LPG would be much more profitable because it is low-cost and can be more easily used by cars and taxis. CNG would be more useful for long distances, such as within the continental region. In fact, we are considering the possibility of offering this service for transports outside the continental region to neighboring countries, including Cameroon, Gabon, Central African Republic and Chad.
WHAT ARE SONAGAS’ KEY PRIORITIES GOING FORWARD, WITH A VIEW TO INCREASING THE CAPACITY AND GLOBAL COMPETITIVENESS OF EQUATORIAL GUINEA’S NATURAL GAS INDUSTRY?
In the period 2022-2025, we will try to find more gas to guarantee current production and be able to diversify. That is our main objective. We have recently accomplished this with the gas that comes from the Alen field and are looking for additional alternatives. The Ministry of Mines and Hydrocarbons is currently negotiating with neighboring countries and SONAGAS is also seeing how we can continue to find more resources. One of the objectives we have is to make Equatorial Guinea a sub-regional gas transformation center. We have to take advantage of the gas that is currently being burned in many parts of the Gulf of Guinea. This is an idea that we have been analyzing for a long time. If we manage to achieve this goal, it will benefit both SONAGAS and other gas companies with which we can work, be they nationals operating in the country or companies from neighboring countries.