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Liquefied Natural Gas

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Liquefied Natural Gas

Marathon is a pioneer in liquefied natural gas (LNG) production and has a major stake in one of the longest, continuously running LNG plants in the world — the first to be built in the United States. The Company has established an Atlantic Basin LNG business that encompasses both ends of the LNG process - the liquefaction, or source side, and the regasification, or marketing side. This builds upon a long running Alaska LNG business where Marathon, along with its partner ConocoPhillips, has owned an LNG liquefaction plant and associated shipping for almost 40 years.

Equatorial Guinea

Operations in Equatorial Guinea are a key component of Marathon’s integrated gas strategy. LNG from this West African country promises to play an increasingly important role in meeting the growing energy needs of the Atlantic Basin.

Marathon and its partners' LNG Train 1 facility on the northwest side of Bioko Island encompasses a 3.7 mmtpa liquefaction plant that is aligned with, and integrated into, Marathon's Equatorial Guinea gas processing operations. Natural gas is purchased from the Alba Field participants (Marathon, Noble Energy, Inc. and a government-owned entity) under a long-term gas supply agreement. Approximately 3 gross tcf of dry gas from the Alba Field will be processed through the LNG facility under a 17-year offtake agreement with BG Gas Marketing Ltd. Marathon and its partners expect to source additional gas in the region to supply the train following expiration of the contract.

Marathon holds a 60 percent interest in the LNG project, along with partners Sonagas (25 percent), Mitsui & Co. (8.5 percent) and a Marubeni Corporation subsidiary (6.5 percent).

Alaska

Marathon has a long history in LNG projects, partnering in 1969 to pioneer the first, and currently only, LNG liquefaction and export operation from North America. This joint venture, which exports LNG from Alaska to Japan, represents the world's longest running LNG export business to Asia.

Under the joint venture, Marathon provides natural gas from its Cook Inlet fields to the Kenai LNG plant where the gas is liquefied. LNG from the joint venture is sold under a long-term contract to two of Japan's largest utilities.

Elba Island

Marathon has delivery rights for up to 58 billion cubic feet (bcf) of LNG per year into the Elba Island, Georgia, LNG regasification terminal through the year 2021, with a possible extension to 2023. To further capitalize on growing U.S. demand, Marathon signed an LNG supply agreement with BP Energy Company. Under the terms of the agreement, BP is supplying Marathon with 58 bcf of natural gas per year, as LNG, for a minimum of five years through 2010.

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