Equatorial Guinea partners with Arabian Energy to build Bioko Oil Terminal

Equatorial Guinea partners with Arabian Energy to build Bioko Oil Terminal

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EQUATORIAL Guinea and Arabian Energy have signed an agreement to collaborate on the development, implementation, construction and financing of the $500 million Bioko Oil Terminal  project. Bioko Oil Terminal aims to become West Africa’s largest oil and petroleum products storage facility and will transform Equatorial Guinea into a pivotal trading and services hub in the region.

‘The Bioko Oil Terminal is a first of its kind storage facility for West Africa and would bring to the region energy security and transport economies of scale and efficiencies like we have never been before,’ said Gabriel Mbaga Obiang Lima, minister of mines and hydrocarbons of Equatorial Guinea. ‘We welcome the addition of Arabian Energy and look forward to working together to move this project into realisation.’

Bioko Oil Terminal brings several advantages for the region. It creates an African centre for the distribution of petroleum products and crude oil and would stimulate the West and Central African industry through job creation and the reduction of imports. The tank farm would attract investment, build local financial capacity and increase shipments to key exports markets.

With 22 storage tanks and a total capacity of 1.2 million cubic meters, Bioko Oil Terminal would be built in two phases, the first consisting of refined production and the second capable of storing, handling and blending middle distillates and lights ends such as diesel, jet fuel, gasoline and naphtha, as well as crude oil. The shared terminal infrastructure will be operated on a ‘first come, first served’ basis.

In a related development, the Organisation of Oil Exporting Countries (Opec) has approved Equatorial Guinea’s request to join the organisation with immediate effect. Equatorial Guinea applied for OPEC membership in January. The Central African oil and gas producer will be sub-Saharan Africa’s fourth OPEC member.

‘Equatorial Guinea’s joining of OPEC is a triumph. This is a proud moment for us,’ said Gabriel Mbaga Obiang Lima. ‘There has never been a more important time to stand together and it is our honour to stand with OPEC as a positive force in global energy. We will use this platform to advance the interests of all African oil and gas explorers and producers and all OPEC members.’

The country’s share of production cuts over the last six months is 12,000 barrels per day, according to  government.

Equatorial Guinea is expected to be the first African nation to develop an offshore field using an FLNG solution – Ophir’s Fortuna FLNG project. The final investment decision is slated for mid-2017.

Equatorial Guinea, which is currently the third-largest oil producer in Africa, said back in January that it was looking to join OPEC, which would boost the continent’s overall influence on international oil markets.

The country pumped an average 289,000 barrels per day (bpd) in 2015, with reserves estimated in the same year at more than 1.1 billion barrels of crude. It is a relatively new addition to the global oil industry, with the first oil struck in 1996. Over the next ten years, however, the West African nation hit 375,000 bpd, according to The Oil and Gas Year.

The biggest oil deposit in Equatorial Guinea is the Zafiro field complex, with estimated ultimate reserves of 1.2 billion barrels. The country also has gas and condensate reserves, the biggest among them concentrated in the Alba field, estimated to hold more than 5 trillion cu ft of gas.

With a population of less than a million people, Equatorial Guinea gets most of its export revenues from oil and gas, and is determined to further expand these revenues. Last June, it launched a licensing round. The first production sharing contracts, according to the country’s mineral resources ministry, should be signed before the year’s end.

The timing of Guinea’s joining the ranks of Opec is interesting: the source who told Reuters about its admission into the club did not say whether it would participate in the production cut extension. It is, however, likely: Opec officials have hinted in the past month that more oil producers need to get on board with the cut to maximise its effect.

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