Afren plc has entered into a co-operation agreement with E.ON Ruhrgas AG and African LNG Holdings Limited.
The Board of Afren announces that the Company has signed a co-operation agreement with E.ON Ruhrgas AG (“E.ON Ruhrgas”) and African LNG Holdings Limited (“African LNG”) to investigate the availability and accessibility of gas in Nigeria, with a focus on the Anambra Basin and South Eastern regions. The parties have the intention to jointly develop, collect and monetize the gas for domestic and export purposes in line with the Nigerian Government’s Gas Master Plan.
The Agreement
The Agreement includes an analysis of potential feedgas, based on an identified target list of upstream gas rich assets and a study of gas gathering infrastructure and potential LNG export solutions. The parties will subsequently decide on jointly establishing corporate structures and funding arrangements.
Osman Shahenshah, Chief Executive of Afren, commented:
“We are delighted to have signed a cooperation agreement with E.ON Ruhrgas and African LNG. We are honoured to be working with E.ON Ruhrgas, a pre-eminent gas company. Afren remains at the forefront in contributing to the Government’s ambitions to develop Nigeria into a major gas producer and assist with the reduction of gas flaring in the region. The cooperation agreement with E.ON Ruhrgas and African LNG to develop upstream gas allows Afren to capitalise on the anticipated growth in global LNG demand, without diluting our upstream focused strategy.”
Dr Dietrich Gerstein, Senior Vice President, LNG Supply Division, of E.ON Ruhrgas, commented:
“LNG is a key element in diversifying E.ON Ruhrgas’s gas supply base. Nigeria is an important target region in the LNG strategy of our company. Within this strategy, the activities conducted under the Agreement with Afren and African LNG can serve as a basis for building an integrated LNG position, including upstream participation, in a significant global gas basin.”
Theo Oerlemans, Chairman of African LNG commented:
“It is our strong belief that West Africa will grow as a major LNG supply point for countries throughout the Atlantic Basin including key markets in Europe and North America. The Agreement with E.ON Ruhrgas and Afren represents an important milestone for our ambitions to become the premier independent integrated LNG company in the Gulf of Guinea.”
Background
The Gulf of Guinea has over 200 trillion cubic feet of gas reserves, with more than 80% of those reserves situated in Nigeria. Afren is currently in negotiations on a number of gas rich upstream assets in Nigeria. African LNG will be Afren’s exclusive downstream liquefaction partner, in developing a monetization strategy.
The Nigerian Government’s 2008 Gas Master Plan focuses on diversifying gas usage between domestic and export purposes. Exploration, aggregation and reduction of flaring are integral to the Gas Master Plan. Against this background, any future joint efforts by the Parties of the Agreement will work towards a multi faceted gas solution including an LNG export facility.
LNG will be a key source of new supply to meet increasing global gas demand. Combined with depletion of indigenous supplies from US and Europe and lack of flexibility of piped alternatives, LNG is emerging as a swing supplier in an increasingly global market.
