Marathon Oil (MRO), through its affiliated company Marathon E.G. Holding Limited, has reached an agreement to further develop the regional gas mega hub (GMH) in Equatorial Guinea.

The Heads of Agreement (HOA) with the Republic of Equatorial Guinea (E.G.) and Noble Energy, a Chevron company, will allow Marathon to move ahead with the development of Phases II and III of the GMH.

The GMH Phase I involved the tieback of the Alen offshore field to Punta Europa complex. Following which, it started gas production in February 2021.

Gas from the Alen field is processed through Alba Plant’s onshore LPG plant and Equatorial Guinea LNG Holdings’ LNG facility, under the combination of a tolling and profit sharing agreement.

Under the Phase II of the GMH, the gas processing at the Alba Unit will be carried out under new contractual terms following the expiration of Henry Hub-linked Alba sales and purchase deal by the end of this year.

Marathon expects the Phase II to materially increase its exposure to global LNG pricing while, significantly improving its cash flow.

Marathon Oil chairman, president, and CEO Lee Tillman said: “We are excited about this critical milestone in the ongoing development of Punta Europa as a world-class hub for the monetisation of local and regional natural gas.

“This announcement builds on our successful partnership of more than 20 years with the E.G. Government, further leveraging and extending the life of E.G.’s world-class gas monetisation infrastructure, including the critical E.G. LNG facility, into the next decade.”

The GMH Phase III will facilitate gas processing from the Aseng oil and gas field offshore Equatorial Guinea at the Punta Europa facilities.

“Additionally, a recently established bilateral treaty on cross-border oil and gas development between E.G. and Cameroon provides other opportunities to further expand the GMH through fast-track monetisation of cross-border wet gas field,” Marathon said in a press statement.