Afren PLC - Gas Monetization Strategy
RNS Number:4087N
Afren PLC
07 December 2006
Afren plc (AIM: AFR)
Gas Monetization Strategy
London, 7 December 2006 - Afren plc ('Afren' or 'the Company') is pleased to
announce that African Gas Development Corporation ('Afgas') and Sociedad
Nacional de Gas, GE. ('Sonagas') yesterday announced the signature of an
exclusive joint venture agreement ('JV') to monetize gas supplies from Nigeria,
Cameroon and Equatorial Guinea through infrastructure and facilities in
Equatorial Guinea. Afren has the first right of refusal to supply upstream gas
to the JV.
Exclusive Joint Venture between Sonagas and Afgas
Sonagas is the national gas company of the Republic of Equatorial Guinea which
has the exclusive responsibility for the State's interest in all existing and
future gas related projects in the country. Sonagas' existing gas projects
include a 25% stake in the US$1.4 billion Equatorial Guinea Liquefied Natural
Gas ('EGLNG') plant, which will begin deliveries of LNG to international markets
from mid-2007. Train 1 has a capacity of 3.8 million tonnes and negotiations are
currently underway regarding Train 2 and possible Trains 3 and 4.
Using Afren as the preferred upstream supplier, the Joint Venture intends to
assemble the necessary regional gas supplies, primarily from Nigeria and
Cameroon, to supplement existing Equatorial Guinea gas sources. Other Sonagas
projects include participation in the Bioko methanol plant which currently
produces approximately 3,000 tonnes per day and the Punta Europa Liquefied
Petroleum Gas plant, which currently produces approximately 25,000 barrels per
day.
The Afgas / Sonagas Joint Venture will be responsible for providing all required
subsea pipelines, facilities and related infrastructure for the gas related
projects. Afgas has entered into Heads of Agreement with each of Acergy (NASDAQ
NM:ACGY; Oslo Stock exchange: ACY) (formerly Stolt Offshore) and AMEC (LSE:
AMEC), for the design, procurement, building and operation of the infrastructure
and facilities required in support of the Joint Venture's various gas
monetization projects.
Impact on Afren
Afren has the right of first refusal to supply gas to the Afgas / Sonagas JV,
thereby securing an additional market for Gulf of Guinea gas reserves. The Gulf
of Guinea has over 200 TCF of gas reserves, with more than 80% of those reserves
situated in Nigeria. Afren is currently in negotiations on a number of upstream
assets in Nigeria, which could potentially provide gas to the JV.
Background
Afgas is engaged in the development, construction, operation and ownership of
integrated gas developments in Africa. Afgas is the largest shareholder in Gasol
plc ('Gasol'), which is a London (AIM:GAS) listed downstream gas development
company focusing on opportunities in Africa and the Gulf of Guinea in
particular. Gasol purchased 20% of Afgas's subsidiary, African LNG Holdings
('African LNG'), earlier this year to integrate and build on the group's gas and
LNG strategy in West and Central Africa, of which the JV with Sonagas is a
critical step.
Afgas was founded by Dr Rilwanu Lukman and Mr Ethelbert Cooper, both founders of
Afren. Afren has a 6.5% equity interest in Gasol and has a strategic
relationship governing the supply of gas to Afgas-Gasol.
Brian O'Cathain, Chief Executive of Afren, commented
'Our strategic relationship with Afgas-Gasol, as the preferred upstream gas
supplier, presents an additional growth leg to Afren. Gas exports to Equatorial
Guinea represent a new route to monetise stranded and associated gas reserves in
the Gulf of Guinea, and also assist with the reduction of gas flaring in the
region.
This relationship allows Afren to capitalise on the anticipated growth in global
and regional LNG demand, without diluting our upstream focused strategy.'
Enquiries:
Afren +44 20 7182 1800
Brian O'Cathain boc@afren.com
---------------
Osman Shahenshah os@afren.com
---------------
Pelham Public Relations +44 020 7743 6673
James Henderson james.henderson@pelhampr.com
------------------------------
Alisdair alisdair.haythornthwaite@pelhampr.com
Haythornthwaite ---------------------------------------
Background information
Afren
Afren (www.afren.com) was founded in December 2004 by a management team
including Dr Rilwanu Lukman with the vision to become the leading pan African
independent Exploration and Production company. Since the Initial Public
Offering in March 2005, Afren has rapidly expanded its African portfolio across
five countries; Nigeria, Sao Tome and Principe, Gabon, Congo and Angola. The
Group is expecting to produce 15 to 20,000 barrels per day by 2008 from its
current portfolio.
Afren will continue to add to its diversified portfolio of near term
developments and high impact exploration licences with the overall objective of
creating substantial shareholder value.
Acergy
Acergy is a company engaged in seabed-to-surface pipeline gathering and
transportation, engineering, procurement, construction and installation services
for the offshore oil and gas industry. Acergy has a market capitalization of
approximately US$3.8 billion and 7000 employees worldwide.
Amec
AMEC is a project management and engineering services company that designs,
delivers and supports infrastructure assets for customers in the oil and gas
industry. AMEC has a market capitalization of US$ 2.3 billion and 20,000
employees worldwide.
This information is provided by RNS
The company news service from the London Stock Exchange
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