This excerpt taken from the MRO 10-K filed Mar 10, 2005.
Equatorial Guinea LNG Project
During 2004, Marathon and its partner, Compania Nacional de Petroleos de Guinea Ecuatorial ("GEPetrol"), the National Oil Company of Equatorial Guinea, through Equatorial Guinea LNG Holdings Limited ("EGHoldings"), began construction of an LNG plant on Bioko Island that will deliver a contracted offtake of 3.4 million metric tons per year (approximately 460 mmcfd). This project will allow us to monetize our gas reserves from the Alba field, as natural gas for the plant will be purchased from the Alba field participants under a long-term gas supply agreement. Construction of the plant continues to progress and startup is projected for late 2007.
At the end of 2004, we held a 75 percent economic interest in EGHoldings, with GEPetrol holding the remaining 25 percent economic interest. In connection with the formation of EGHoldings, GEPetrol was given certain contractual rights with respect to the purchase and resale to a third party of a 13 percent interest in EGHoldings currently held by Marathon. These rights give GEPetrol the option to purchase this 13 percent interest and resell it to a third party. These rights specify that we will be reimbursed for our historical costs plus an additional specified rate of return, which escalates depending on the time period during which such purchase and resale occurs, and a right to share in additional proceeds above those amounts under certain circumstances of resale. If GEPetrol's rights are not exercised within one year from date of project sanction, which was in June 2004, the rights expire.
EGHoldings has signed a Sales and Purchase Agreement with a subsidiary of BG Group plc ("BGML") under which BGML would purchase the LNG plant's production for a period of 17 years on an FOB Bioko Island basis with pricing linked principally to the Henry Hub index. The LNG would be targeted primarily to a receiving terminal in Lake Charles, Louisiana, where it would be regasified and delivered into the Gulf Coast natural gas pipeline grid.