(Ecofin Agency) - Engie has announced that it has postponed plans of constructing a liquefied natural gas export plant on the coast of the Kribi region, South of Cameroon.The project, which was supposed to be a liquefaction plant with a maximum capacity of 3.5 million metric tons of liquefied natural gas for export, has been suspended due to unfavorable market conditions.

The French utility and LNG player had been developing the project in collaboration with Société Nationale des Hydrocarbures (SNH) since 2008 and they both completed the basic engineering design (FEED) of the Cameroon LNG project at the beginning of this year.

“As evidenced across the world, prevailing market conditions are not conducive to developing medium/large LNG liquefaction projects today. As such, the project has been paused ahead of the next phase of development (Engineering Procurement and Construction tender),” the company’s spokeswoman said.

However, the LNG project is estimated to cost up to $5billion and is designed to produce liquefied petroleum gas (LPG) for sale in the local market. The project also included a 170-mile subsea gas pipeline linking a series of offshore gas production platforms to the onshore LNG plant.Engie and SNH, in 2012, signed an initial commercial agreements to buy natural gas with upstream operators which have access to the gas resources needed to supply the proposed plant in Cameroon.

Cameroon LNG was among the three projects backed by the government. The two other projects are Cameroon FLNG project backed by Perenco, SNH and Golar LNG and the Etinde JV led by NewAge, LNG World News reports.

Anita Fatunji