Equatorial Guinea in LNG sale talks as Shell deal winds down

LONDON, (Reuters) - Equatorial Guinea is in talks to sell liquefied natural gas (LNG) supply from its Punta Europa project to independent and state-backed oil companies and traders from 2020 as it winds down an exclusive deal with Royal Dutch Shell.

Gabriel Obiang Lima, Minister for Mines and Hydrocarbons, told Reuters he is seeking to lift royalties from future LNG deals to 50 percent compared with 12.5 percent under existing arrangements with Shell.

Lima said talks are progressing with China National Offshore Oil Corporation (CNOOC), Russia’s Lukoil, France’s Total, trader Vitol, a joint venture of Lukoil and NewAge and also Shell.

Supply deals will be offered for 3-5 years from 2020, Lima said.

The country’s LNG plant, operated by Marathon Oil Corporation, is currently fed by the depleting Alba gas field, which faces a cliff-edge dip in output from 2019/2020, he said.

Future production will be underpinned by pooling supply from the country’s and wider region’s stranded gas fields, raising the prospect of eventually boosting LNG output.

(Reporting by Oleg Vukmanovic Editing by Alexandra Hudson)

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