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Equatorial Guinea May Decide on $2.2 Billion LNG Plant in 2012

Sept. 28 (Bloomberg) — Equatorial Guinea may decide to build a $2.2-billion liquefied natural gas plant in 2012, according to Gabriel Obiang Lima, a vice minister of mines, industry and energy.

The unit would be the second in the African country, which has about 8.5 trillion cubic feet of natural-gas reserves. The investment estimate also includes spending on pipeline infrastructure and hubs, Lima said today in an interview in Cape Town.

State-owned Sociedad Nacional de Gas, or Sonagas, together with Germany’s E.ON AG, Portugal’s Galp Energia SGPS SA and Spain’s Union Fenosa SA, has been designing a plan to develop the local gas industry. The African nation needs to ensure fuel supply to domestic industry and to stop flaring, or the burning of gas associated with oil, most of which comes from the Exxon Mobil Corp.-operated Zafiro field, Lima said last year.

“Priority number one is the gas master plan,” Serapio Sima Ntutumu, a deputy general director at Sonagas, said today at an Africa Energy Week conference in Cape Town. The second priority is a gas distribution plan and third is expansion and diversification, he said.

Equatorial Guinea LNG Holdings Ltd. can expand by adding a second production unit and load its first cargo in 2016 or 2017, according to Marathon Oil Corp. estimates made last year. Gas supplies from Nigeria and Cameroon may be required to make the unit commercially viable.

–Editors: Rob Verdonck, Todd White