Uniform Reporting Format:

Activities Implemented Jointly Under the Pilot Phase

List of Projects

A. Description of the AIJ project

• 1. Title of project: Atlantic Methanol Production Company (AMPCO) – Environmentally Responsible Gas Processing on Bioko Island

  2. Host country: Equatorial Guinea

  3. Brief project description:

  • The project will reduce greenhouse gas (GHG) emissions by utilizing gas that is currently, and would otherwise, be flared into the atmosphere at an approximate rate of between 88 – 120 million cubic feet per day for the production of methanol.

  4. Participants:

  Name of Organization or Individual	Country
  Government of Equatorial Guinea	Equatorial Guinea
  CMS Energy	U.S.A.
  Samedan	U.S.A.

  Item
  Organization
  Name of organization (original language) or Name of individual if unaffiliated with any organization	Government of the Republic of Equatorial Guinea
  Name of organization (English)	Same
  Acronym (original language)	None
  Acronym (English)	GREG
  Department	Ministry of Energy and Mines
  Function(s) within the AIJ project activities	Financing
  Street	C/o Embassy of the Republic of Equatorial Guinea 2020 16th Street, NW
  City	Washington
  State	DC
  Post code	20009
  Country	U.S.A.
  Telephone	(202) 518-5700
  Fax	(202) 518-5252
  E-mail
  World Wide Web-URL address
  Administrative Officer Responsible for the Project
  Surname	Nsue
  First name, middle name	Teodoro Biyogo
  Job title	Ambassador to the United States
  Direct telephone	(202) 518-5700
  Direct fax	(202) 518-5252
  Direct e-mail
  Contact Person for AIJ Activities (if different from the Administrative Officer)
  Surname	Same
  First name, middle name
  Job title
  Direct telephone
  Direct fax
  Direct e-mail
  Item
  Organization
  Name of organization (original language) or Name of individual if unaffiliated with any organization	Samedan Oil Company
  Name of organization (English)	Same
  Acronym (original language)	None
  Acronym (English)	None
  Department
  Function(s) within the AIJ project activities	Project administration, and financing
  Street	350 Glenborough Suite 300
  City	Houston
  State	Texas
  Post code	77067
  Country	U.S.A.
  Telephone	(281) 876-6200
  Fax	(281) 876-6153
  E-mail
  World Wide Web-URL address	www.samedan.com
  Administrative Officer Responsible for the Project
  Surname	Cook
  First name, middle name	Rodney
  Job title	Manager of International Operations
  Direct telephone	Same
  Direct fax	Same
  Direct e-mail	rcook@samedan.com
  Contact Person for AIJ Activities (if different from the Administrative Officer)
  Surname	Same
  First name, middle name
  Job title
  Direct telephone
  Direct fax
  Direct e-mail
  Item
  Organization
  Name of organization (original language) or Name of individual if unaffiliated with any organization	CMS Energy
  Name of organization (English)	Same
  Acronym (original language)	None
  Acronym (English)	None
  Department	CMS Oil and Gas Company CMS Gas Transmission Storage Company
  Function(s) within the AIJ project activities	Project development, administration, and financing
  Street	Fairlane Plaza South 330 Town Center Drive Suite 1100
  City	Dearborn
  State	Michigan
  Post code	48126
  Country	U.S.A.
  Telephone	(313) 436-3600
  Fax	(202) 223-6178
  E-mail
  World Wide Web-URL address	www.cmsenergy.com
  Administrative Officer Responsible for the Project
  Surname	Pickart
  First name, middle name	George Anthony
  Job title	International Affairs Director
  Direct telephone	(202) 293-5794
  Direct fax	(202) 223-6178
  Direct e-mail	gapickart@cmsenergy.com
  Contact Person for AIJ Activities (if different from the Administrative Officer)
  Surname	Same
  First name, middle name
  Job title
  Direct telephone
  Direct fax
  Direct e-mail

  • 5. Description of AIJ project activities

  Item
  Type of Project
  Sector(s)	Energy
  Primary activity(ies)	Utilization of flared gas
  Project Location
  Country	Equatorial Guinea
  Exact location (city, state, region)	Punta Europa, Bioko Island
  Key Dates and Current Stage of Project
  Project starting date (month/year)	May 2001
  Project ending date (month/year)	May 2026
  Project lifetime (years)	25
  Current stage of project	In progress
  General Project Description and Technical Data
  The Atlantic Methanol Production Company is constructing a methanol production facility adjacent to an existing gas processing facility on the northern coast of Bioko Island, Equatorial Guinea. Residue gas (dry methane) has been flared at the exit of the gas processing facility initially at a rate of approximately 88 million cubic feet per day (mmcf/d) to the current volume of approximately 125 mmcf/d. This flared gas will be converted by the new plant into methanol, which will be exported for sale on the international market. The projected greenhouse gas reductions that result from the flared gas being manufactured into a useful product are 2.85 million metric tonnes of carbon dioxide equivalents per year for each year of the project. The project will monitor gas coming into the plant and methanol being produced. From this data, GHG emissions associated with the operation can be subtracted from the calculated GHG reductions.

  • 6. Cost

    • (a) Explanation of methodology for calculating cost data

  Methodology for Calculating Cost Data

  The nature of the costs involved in developing the AIJ project include: Nature of Costs Specific Costs Methodology for Costs Estimates Application development Technical personnel Time and Materials ERT consulting Time and Travel Travel to Washington D.C Travel Monitoring Plan Development Technical Personnel Time and Materials Monitoring Equipment Equipment Bid Estimates Monitoring Plan Implementation Technical personnel Time and Materials

  • (b) Cost data–Project development

  Itemized Project Development Costs

  (Not Available)

  • (c) Cost data–Project implementation

    Itemized Project Implementation Costs

    (Not Available)

  • 7. Monitoring and verification of AIJ project activities and results

  Item	Please Complete
  Party(ies) that will be monitoring project activities	CMS Energy, Samedan, GREG, and Environmental Resources Trust, Inc.
  Party(ies) that will be externally verifying project results	Environmental Resources Trust, Inc.
  Date when the monitoring plan became (or will become) operational (month/year)	2nd Quarter, 2001
  Types of data that will be collected	Fuel flow and combustion efficiency
  Description of Monitoring and Verification Activities and Schedule for Implementation
  The monitoring will be performed by AMPCo plant personnel and verified by Environmental Resources Trust Inc. Monitoring will commence with plant start-up scheduled to begin in May 2001. Fuel flow at many strategic points within the plant will allow the determination of GHG emissions and reductions.

  • B. Governmental approval

  Item	Please Complete
  Please check one of the following.	This report is a first report. or This report is an intermediate report. or This report is a final report.
  Please check one of the following:	This report is a joint report. Letter(s) of approval of this report from the designated national authority of the other Party(ies) involved in the activity is(are) attached in Section J, Annex. or This report is a separate report.
  Additional comments (if any):

  • C. Compatibility with, and supportiveness of, national economic development and socioeconomic and environmental priorities and strategies

  Compatibility with Economic Development and Socioeconomic and Environmental Priorities

  The project will help to build developmental capacity and have a substantial positive effect on Equatorial Guinea’s economic growth and social progress. The partners, for instance, have worked effectively to establish a new and productive dialogue between the Overseas Private Investment Corporation, the US State Department, and the Government of Equatorial Guinea to lay the groundwork for substantial progress in the areas of labor and workers rights. This dialogue has already produced both verbal and written commitments by the President of Equatorial Guinea to senior State Department officials that the government will institute new programs and policies to shore up labor and workers rights protections. These commitments are a direct result of the partners’ efforts and will be implemented, monitored and sustained through the life of the AMPCO project. In addition, the advent of the AMPCO methanol project, the first large onshore facility in the country, brought expansive new opportunities to Equatorial Guinea for local employment. The project emerged as a foundation for new and progressive government policies and practices on local employment, which the partners have supported and embraced. When operational, the plant will employ approximately 220 to 240 people total, of which roughly 140 will be skilled, professional staff. The partners will work very closely with the government of Equatorial Guinea to ensure that there will be a strong initial commitment to hiring local workers, and that the percentage of local workers will increase in significant fashion over the first five years of operation. As part of that effort, the partners have committed to a comprehensive training and education effort, which will produce a highly advanced, and technical labor pool, with an emphasis on vocational specialties, operations and maintenance, safety and language skills. These skilled workers will in turn be available for other US and foreign investors, and as additional investment accrues their ranks will grow. The AMPCO and Alba partners are committed to good corporate citizenship and are undertaking a number of activities beyond their contractual obligations in Equatorial Guinea to benefit the community and its people. These projects are funded through corporate contributions, or are structured so that they will be funded from royalties from the project so that profits are returned directly to the people. As an example of some of these activities, the partners have: Developed, constructed and begun operation of a 10-MW power plant on Bioko Island to meet all power requirements for the island, at a cost of more than $12 million. The partners conduct ongoing meetings with the Ministry of Mines and the local power company to assist with electrical power for Malabo. The partners also have undertaken a program to clear and maintain all power transmission lines from the hydroelectric plant in Riaba, at a current cost of $20,000 per month; Made a $425,000 commitment to construct a local market on the mainland; Contributed $200,000 to construct a temporary bridge on the road between the airport and Malabo that was washed out by a flood, and contributed $750,000 for the construction of a permanent bridge. The partners have also agreed to participate in the reconstruction of the entire road; Purchased two vehicles at $36,000 and provided two drivers and chemicals to conduct a malaria spraying program in Malabo five or more nights per week; Provided $45,000 in equipment and in-kind assistance to construct facilities and provide street lighting and electricity in advance of an international conference; Initiated discussions with US universities for extension programs to supplement the company’s training and vocational education effort; Provided books and supplies for local schoolchildren.

  The partners have supported and will continue to support international non-governmental and other organizations that promote democratic ideals and principles through education and support for democratic systems in Equatorial Guinea. CMS Energy provided a $10,000 grant to the International Federation for Electoral Systems (IFES) to support the establishment and operations of an Elections Observer Mission for Equatorial Guinea’s most recent presidential election. CMS Energy similarly provided $7,500 to the Institute for Democratic Strategies (IDS) in support of a multifaceted democratization program in Equatorial Guinea. These projects are illustrative of the fact that the partners undertake a commitment to social responsibility in the community they serve. The partners exercise and encourage responsible and ethical business practices in all of dealings with customers, local partners, vendors, and suppliers. The partners continually seek to observe certain fundamental values in their interaction with local and national leaders, opinion-makers, and government officials, including adherence to the rule of law, tolerance, and respect. The partners also promote the establishment of greater transparency in business transactions, the development of sound and open regulatory regimes and practices, and the adoption of policies and laws that encourage free market principles.

  • D. Environmental, social/cultural, and economic impacts of the AIJ project

  Non-Greenhouse-Gas Environmental Impacts of the Project

  1. AMPCO as part of its initial development is creating new environmental (or health and safety) policies or procedures. These are to be based on the current environmental, health and safety policies the two majority partners (CMS and SAMEDAN) have in place as individual companies and will be implemented through the Operational and Maintenance Manual for the plant once construction has been completed. These policies and procedures will reflect recognized environmental, health and safety standards and industrial codes of good practice as specified and agreed to in the Manufacturing and Marketing Agreement with Equatorial Guinea. The Turnkey Agreement for the methanol plan project sets out contract and requirement for the design, construction and test operation of the plant. It outlines, a minimum compliance with the following standards and specifications: OSHA (Occupational Safety and Health Association, US Department of Labor), NFPA (US National Fire Protection Association); and World Bank environmental guidelines 2. The procedures specifically developed for environmental protection on construction sites include hazardous waste management, pollution prevention, spill prevention, control and countermeasure (SPCC); spill response; storm water management; used oil management; recycling; and waste management. AMPCO’s contractor requires that all of their sub-contractors operate within the construction, environmental, health and safety policies and procedures unless the company operates under a more stringent system. 3. Daily site walkovers are undertaken by the Environmental, Health & Safety (EH&S) Officer to monitor the implementation of general safety procedures throughout the project site and to ensure that good "housekeeping" is generally maintained. Weekly meetings attend by all on-site company representatives are held where, in addition to progress assessment, environmental and health and safety issued are discussed. 4. Currently setting up procedures, work practices and standards for application at managerial and working levels on site - including plant modifications/design safety procedures, site safety procedures; environmental procedures and health and hygiene. The environmental procedures will address, for example, the control and disposal of wastes, effluent discharges and emission to air, protection of sensitive areas, spill prevention and response, soil protection, storage and disposal, environmental monitoring and assessment, noise surveys. 5. Project medical facilities will contribute to local medical infrastructure. 6. The Project has provided to the USIJI a copy of the Environmental Impact Assessment (EIA) that was developed to support the project. The EIA has been posted on the Overseas Private Invest Corporation’s web page for the required 60-day period in which no third party comments were received. A copy of the EIA has been provided to the USIJI Technical Review Committee under separate cover. 7. In terms of localized air quality the methanol plant is predicted not to represent a significant adverse effect on the adjacent area, due to the predicted pollutant concentrations being well within air quality criteria, the isolation of the site, the sparse population present and prevailing wind direction. Dust generation will be minimal once construction has ceased. In addition, the large reduction of GHG associated with the extinguishing of the existing ground flare will yield a substantial positive local and global impact. With regard to water quality, there will remain a risk of some form of surface water and marine water contamination through unexpected events such as failure of water treatment units, containment measures, and emergency situations. However, methanol has low acute toxicity to aquatic organisms. Application of good environmental management practices, maintenance of equipment and protective structures and training should help minimize the occurrence of a release and the significance of the consequences. A full time environmental engineer will be employed to implement best management practices and follow plant environmental procedures aimed at protecting the environment. 8. The consequences of accidental release of methanol to the ground are considered insignificant. Biodegradation is the major route of removal of methanol from soil. Several species of methylobacterium and methylomonas are capable of utilizing methanol as a sole carbon source. 9. Increased shipping will be expected to have a moderate overall net adverse effect in terms of risk of impacts associated with spills of substances such as oil, methanol and discharges of ballast/bilge water. Minor or major methanol spills are expected to have limited short term and long terms adverse environmental effects on account of the chemical properties of methanol which facilitate rapid dilution and biodegradation. 10. It is predicted that there would be no adverse noise impact at Mongola village or at the property boundary. A minor adverse impact is likely to remain within the site from plant activity, in particular at the nearest accommodation blocks (these are expected to be moth-balled until the maintenance/shut down periods) and administration office to the methanol plant, after accounting for additional mitigation measures. 11. Due to the potential negative health effects of methanol exposure, all employees will be given awareness training. 12. Disposal of solid waste will be at approved facilities by qualified contractors or carriers, both during construction and throughout the operating life of the plant. 13. Small amounts of hazardous materials may be generated. They will be disposed of through licensed disposal services. Based on the information contained in the EIA and the Operating and Maintenance procedures, the project is confident that the environmental impacts are negligible compared to the positive impacts of GHG emission reductions.

  Social/Cultural Impacts of the Project

  The project will engender social progress consistent with the development impacts described above, and will contribute to the development of the capabilities and professionalism of the indigenous workforce.

  Economic Impacts of the Project

  The project will have a substantial positive economic impact by creating a productive use for gas for which there had been no market and that previously had been flared as a by-product. The project will establish a new industry in Equatorial Guinea and help to strengthen and diversify the country’s export base.

  • E. Greenhouse gas impacts of the AIJ project

    1. Scenario description

  Item	Please Complete for Each Site
  Site Designation
  Site number (order of presentation in this report)	1
  Site name/designation	Atlantic Methanol Production Co. (AMPCO)
  Project sector	Energy
  Reference Scenario
  Primary activity(ies)	Flaring Natural Gas
  Has the reference scenario changed since the last report? (If yes, explain any changes below.)	Yes No This is the first project report.
  Description: Rich natural gas is extracted from the Alba field, off the coast of the island of Bioko, Equatorial Guinea, and the condensate removed at an onshore processing plant. The resultant natural gas is disposed of by flaring. To utilize the natural gas the AMPCO Methanol Plant is being constructed. To support the plant, the Alba field was expanded to provide additional natural gas and to provide additional LPG. 30.67 Mtonnes/yr of methane was flared in the Reference case. Diversion of the flared gas to the methanol plant is assumed to occur for the next 25 years.
  Predicted Project Scenario
  Primary activity(ies)	Utilization of Natural Gas Previously Flared
  Description: The construction of the Methanol Plant on the island of Bioko, Equatorial Guinea will allow the termination of flaring of natural gas from the Punta Europa LPG plant. The operation of the Methanol plant is scheduled to commence in May 2001. At this time, the utilization of previously flared natural gas will used to manufacture methanol. Greenhouse gas emission reductions will occur as a result of the termination of the ground flaring of natural gas. Some greenhouse gas emissions will occur as a result of the methanol plant operation.
  Actual Project
  Primary activity(ies)	This information is not yet available
  Description:

  • 2. GHG emission/sequestration calculation methodology

  GHG Emission/Sequestration Calculation Methodology
  Site number	1
  Project sector	Energy
  Description of Calculation Methodology for the Reference Scenario
  The GHG emissions associated with the flaring of waste natural gas in a ground flare were calculated based on the ideal gas law and an assumption that the ground flare was 85% efficient. Assuming 29 bcf/yr of natural gas is combusted in the ground flare; 0.85 * 29 bcf/yr * 44lb CO2/lbmole = 1.36 Mtonnes CO2/yr 0.15 * 29 bcf/yr * 16 lb CH4 lbmole = 0.088 Mtonees CH4/yr (0.088 Mtonnes CH4/yr * 21 GWP) + 1.36 Mtonnes CO2/yr = 3.20 Mtonnes CO2 eq/yr
  Description of Calculation Methodology for the Project Scenario
  GHG emissions associated with the Project scenario include emissions from the methanol plant flare and miscellaneous equipment resulting in emissions equal to 0.193 Mtonnes CO2 eq/yr. Emissions associated with the construction and deforestation is equivalent to 3.98 Mtonnes CO2 eq. These emissions are divided by 25 and spread out over the life of the project.
  Description of Calculation Methodology for the Actual Project
  This information is not yet available.

  • 3. GHG emission/sequestration data

    • (a) Reporting of GHG emissions/sequestration

  (Insert the following Excel spreadsheets: Site GHGs Projected, Site GHGs Actual, Total GHGs Projected, Total GHGs Actual)

  • 
  • (b) Additional information on GHG emissions/sequestration

  Indirect or Secondary GHG Impacts (Positive and Negative)

  GHG emissions that result indirectly from the use of methanol were not considered in this AIJ project. It is estimated that approximately 66% of the chemical grad methanol is bound up chemically in products or feedstock. The other 34% (27% MTBE, 2.3% fuels and 4.1% solvents) is used to meet market demands and offset other less economical supplies of MTBE, fuels and solvents. Production of methanol in a new facility that burns natural gas for a majority of it’s steam and energy needs allows the GHG emissions associated with such a process to be minimized, as natural gas emits less GHG per energy unit than any other fossil fuel used in energy or steam production.

  Factors That Could Cause the Future Loss or Reversal of GHG Benefits

  Future losses of GHG reductions could occur if the natural gas supply should end prior to the estimated life of the methanol plant (25 years).

  Strategy for Reducing the Risk of Future Loss or Reversal of GHG Benefits

  The strategy for reducing the risk of loss of natural gas supply to the plant will involve well monitoring and plant operation to determine if the gas supply and the plant economics justify well field expansion.

  • F. Funding of the AIJ project

    1. Identification of funding sources

    • (a) Funding sources for project development

  Funding Source	Country of Funding Source	Amount ($US)	Percent of Total Funding (%)
  CMS Energy Samedan	U.S.A. U.S.A.	$15 mm $15mm	50% 50%
  Total			100

  • (b) Funding sources for project implementation

  Funding Source	Country of Funding Source	Amount ($US)	Percent of Total Funding (%)	Is This Funding Assured? (Y/N)
  Overseas Private Investment Corporation	U.S.A.	$173 mm	40%	Y
  CMS Energy	U.S.A.	$124.7 mm	27%	Y
  Samedan	U.S.A.	$124.7 mm	27%	Y
  GREG	Eq. Guinea	$26.7 mm	6%	Y
  Total		$450 mm	100

  • 2. Assessment of additional funding needs:

  Current or Planned Activities to Obtain Additional Funding

  None

  • G. Contribution to capacity building and technology transfer

  Contribution to Capacity Building and Technology Transfer

  The project will demonstrate to Equatorial Guinea and to other countries in the West/Central Africa region the potential benefits to utilizing stranded gas. The project will build capacity by creating a highly skilled and professional work force among the indigenous population. The project will introduce technology and knowledge by introducing the production of methanol to the country.

  • H. Recent developments, technical difficulties, and obstacles encountered

  Recent Project Developments

  The project is under construction and expected to be completed in the second quarter of 2001.

  Technical Difficulties and Other Obstacles Encountered

  None.

  • I. Additional information

  Additional Information

  None

  J. Annex

  • 1. Host country acceptance of the AIJ project
  • 2. Letters of approval of this AIJ project report:
    • See attached letter of concurrence.

  (concurrence letter)