Equatorial Guinea to Build $500 Million Oil Terminal, Double Export Capacity

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Equatorial Guinea is planning to build a 2.2 million-cubic-meter-capacity oil terminal on Bioko Island, which is off the coast of Cameroon and northwest of Equatorial Guinea's mainland.

The construction project will involve an investment of $500 million and will begin in 2014. It is scheduled to be completed in 36 months from the start of construction. Vopak (OTC:VOPKF) (Rotterdam, Netherlands) will be the initial operator of the terminal, but Equatorial Guinea will look to add another operator.

"We are very interested in the oil terminal, because that would allow a lot of the producers and traders to accumulate crude oil and be able have VLCCs (very large crude carriers) to ship this to Asia," said Gabriel Mbaga Obiang Lima, Equatorial Guinea's minister of mines.

Crude oil, along with LNG, is Equatorial Guinea's main export, with 200,000 barrels per day (BBL/d) being shipped out. If current drillings are successful, the export volume is expected to go up to 300,000 BBL/d in about five years' time, Obiang said.

Total exports amount to 419,000 BBL/d of liquids, including crude, methanol and LNG, and this overall total is expected to double in five years. China is the major buyer of the crude, with Japan and South Korea being the major gas buyers. Obiang said that the country has no plans to build a refinery, as it would not be feasible economically.

An additional 16 oil and gas blocks, in areas such as the Cameroon Basin and Niger Delta, will be put up for licensing, but no dates have been set. Obiang said that the best way to promote the licensing was being studied and that an announcement would be made in the first quarter of 2014.

Opportunities are also being explored in the pre-salt area of Rio Muni. PanAtlantic (Houston, Texas) and Hess Corporation (NYSE:HES) (New York, New York) are to drill a first well and perform studies. China National Offshore Oil Corporation (NYSE:CE) (Hong Kong) will begin drilling a deep-water well in Rio Muni in 2014.

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