UNCTAD- FORUM, Nairobi, May 23th – 25nd, 2007 Juan Antonio NDONG ONDO General Director SONAGAS G.E. GAS AND PETROCHEMICAL INDUSTRY IN EQUATORIAL GUINEA NOT AN OFFICIAL UNCTAD RECORD

Agenda 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

Introduction With the initial production of national hydrocarbons, since , 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. 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: Production Liquefied Petroleum Gas (LPG): 20,000 BOE/D Liquefied Petroleum Gas (LPG): 20,000 BOE/D Methanol: 20,000 BOE/D Methanol: 20,000 BOE/D LNG by 2007: 75,000 BOE/D LNG by 2007: 75,000 BOE/D Gas utilization in power generation (Current daily consumption: 5.3 MMSCF/d). Gas utilization in power generation (Current daily consumption: 5.3 MMSCF/d).

New Opportunities: Gas Gathering 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 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 for the entire Gulf of Guinea region. Purposes

Petrochemical Development Opportunity RELATED INDUSTRIES Further development of methanol processing and export facilitiesFurther development of methanol processing and export facilities Fertilizer production and exportsFertilizer production and exports Polypropylene production and exportsPolypropylene production and exports LPG DISTRIBUTION Much potential exists to develop the market for LPG (as an efficient, economical, clean burning source of energy) along the west coast of Africa, where consumption rates lag considerably behind those in other gas-rich areas of the worldMuch potential exists to develop the market for LPG (as an efficient, economical, clean burning source of energy) along the west coast of Africa, where consumption rates lag considerably behind those in other gas-rich areas of the world

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 (Atlantic Methanol Production)

National Gas Monetization LPG: On stream since 1991 (Mixed product).On stream since 1991 (Mixed product). Upgraded ; cost 360 mm US $.Upgraded ; cost 360 mm US $. Main processing product: Wet GasMain processing product: Wet Gas -Butane ………………….. 8,000 Bbls/d -Propane ………………… 14,000 Bbls/d -Secondary Condensate ….6,600Bbls/d Primary markets: US and EuropePrimary markets: US and Europe

National Gas Monetization $1.4 billion EPC project$1.4 billion EPC project 3.4 MTPA capacity—17 year offtake agreement with BG3.4 MTPA capacity—17 year offtake agreement with BG Group PLC First equity energy investment by SONAGASFirst equity energy investment by SONAGAS First shipment starting on May First shipment starting on May Catalyst for regional gas hubCatalyst for regional gas hub Gas SupplyGas Supply –~600 million cubic feet per day purchased from the Alba field Plant CapacityPlant Capacity –Nameplate 3.72 million tons of LNG per annum (mtpa) LNG StorageLNG Storage –2 x 136,000m3 insulated tanks LNG

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 development of natural gas resources.It is the state’s representative in all activities related to the development of natural gas resources. SONAGAS G.E. is responsible for the diversification of gas as an energy base and for the diversification of revenues derived from gas utilization.SONAGAS G.E. is responsible for the diversification of gas as an energy base and for the diversification of revenues derived from gas utilization. It promotes opportunities for the development of gas projects throughout the country, but is also allowed to participate in projects outside of Equatorial GuineaIt promotes opportunities for the development of gas projects throughout the country, but is also allowed to participate in projects outside of Equatorial Guinea

Company objectives Designs, creates and operates, as well as continuously evaluates any general processing, marketing, treatment and gas utilization programs in the Republic of Equatorial Guinea,Designs, creates and operates, as well as continuously evaluates any general processing, marketing, treatment and gas utilization programs in the Republic of Equatorial Guinea, Serves as an agent of the Government in order to revert to the state any benefits obtained from gas marketing and processing,Serves as an agent of the Government in order to revert to the state any benefits obtained from gas marketing and processing, Undertakes, either individually or outside the national territory, any relevant activities by nature and especially any gas processing, marketing and refining activities.Undertakes, either individually or outside the national territory, any relevant activities by nature and especially any gas processing, marketing and refining activities.

Projects Participation PARTNERS AND INTEREST: - MARATHON E.G.: 40% - NOBLE E.G.: 40% - SONAGAS G.E.: 20% 20,000 BOE/D Gross LPG Production PARTNERS AND INTEREST: - MARATHON E.G.: 45% - NOBLE E.G.: 45% - SONAGAS G.E.: 10% 20,000 BOE/D Gross Methanol Production PARTNERS AND INTEREST: - MARATHON E.G.: 60% - SONAGAS G.E.: 25% - MITSUI: 8.5% - MARUBENI: 6.5% 75,000 BOE/D Gross LNG Train 1

COMMUNITY PROJECTS PARTICIPATION Malaria Reduction in Bioko Island (More than $5 Million investment)

CONCLUSIONS 1.There is an existing infrastructure for gas transformation in E.G., 2.There are several opportunities to invest in the E.G. hydrocarbons 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