Marathon Oil announces LNG sales agreement with Glencore for Alba Gas
Published by Jessica Casey,
Editor
LNG Industry,
Marathon Oil Corporation has entered, through its wholly-owned subsidiaries, into a five-year firm LNG sales agreement with Glencore Energy UK Ltd, a subsidiary of Glencore PLC, for a portion of its equity natural gas produced from the Alba Field (Alba Unit, MRO 64% working interest) in Equatorial Guinea (E.G.), effective 1 January 2024. The pricing structure for the LNG sales agreement is linked to the Dutch Title Transfer Facility (TTF) index, less a fixed transportation fee, providing Marathon Oil with significant incremental exposure to the European LNG market.
Separately, due to the expected arbitrage between LNG and methanol pricing, Marathon Oil announced it expects to optimise its E.G. integrated gas operations in 2024 by redirecting a portion of Alba Unit natural gas from the local methanol facility (MRO 45% working interest) to the LNG facility (MRO 56% working interest).
“I'm excited to announce this new sales agreement linked to the European LNG market, signalling the conclusion of the legacy Henry Hub linked contract,” said Chairman, President, and CEO Lee Tillman. “The timing of this new sales agreement, EG LNG's track record of reliable operations, and the plant's proximity to Europe resulted in tremendous demand and an extremely competitive process. At recent forward curve pricing, we expect to realise an approximate y/y EBITDA increase of over US$300 million next year across our E.G. integrated gas business, reflecting our differentiated and increasing exposure to the global LNG market. This success positions us strongly for the next phase of opportunities to advance the E.G. Gas Mega Hub, including up to two infill development wells in the Alba Unit and the potential tie-in of the third-party Aseng gas cap monetisation.”
Alex Sanna, Head of Oil and Gas Marketing, Glencore PLC, added: “We are delighted to further expand our cooperation with Marathon Oil. This deal reconfirms our commitment to the growth and diversification of our LNG portfolio as we continue to support producers and end users as a reliable and responsible off-taker and supplier.”
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/26102023/marathon-oil-announces-lng-sales-agreement-with-glencore-for-alba-gas/
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