Oil and gas company New Age and Victoria Oil & Gas have signed a non-binding Letter of Intent (LOI) for the supply of gas from the Etinde field, offshore Cameroon.
The Etinde block is operated by New Age with a 37.5% working interest. Bowleven and Lukoil are partners with a 25% and 37.5% working interest, respectively
Bowleven said on Wednesday that, under the terms of the LOI, Victoria and New Age would seek to enter into a gas supply agreement (GSA). The LOI envisages that New Age will supply processed gas to Gaz du Cameroun S.A. (GDC), a subsidiary of Victoria Oil & Gas, at Limbe. GDC would then transport the gas to Douala.
The LOI anticipates that the GSA would be for a period of 20 years and would see New Age supply a minimum of 25mmscf per day of gas to GDC for the first three years, increasing to a minimum of 30 mmscf per day.
The LOI remains in force until the earlier of the signature of a GSA or March 31, 2021. Ultimately, finalization of the proposed GSA terms and conditions is directly linked to the Final Investment Decision (FID) in relation to the Etinde field development project.
Eli Chahin, Chief Executive Officer of Bowleven plc, said: “As we work towards making a final investment decision on Etinde this year, today’s announcement by VOG is a positive step towards reconfirming the commerciality of the license. The agreement is also positive for Cameroon, as it will see gas delivered to independent power suppliers in the country, and for our stakeholders, as it demonstrates the high demand for natural gas in the region.”
The Etinde Permit (former Block 7) lies in shallow water in the Rio del Rey Basin, offshore Cameroon, and comprises four proven reservoir intervals within the Pliocene and Miocene formations.
Following the successful 2018 appraisal campaign, the joint venture has moved the Etinde project to a development planning phase. Several development screening concept studies are now underway to optimize the development of the Etinde field.
According to information on New Age’s website, the Final Investment Decision is expected by early 2020, with first production envisaged in 2022.
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