ADNOC to buy Galp's 10% stake in Area 4 Mozambique
The Abu Dhabi National Oil Company (ADNOC) on May 22 announced the acquisition of Portugal-based Galp’s 10% interest in the Area 4 concession of the Rovuma basin in Mozambique. This acquisition will grant ADNOC access to LNG production from the concession, which boasts a combined production capacity exceeding 25mn tonnes/year.
Upon completion of the transaction, Galp will receive approximately $650mn for its shares and shareholder loans. As of the transaction reference date (December 31, 2023), lease liabilities were $525mn, the Portugese company said in a separate statement. Additional contingent payments of $100mn and $400mn will be payable upon the final investment decision of the Coral North and Rovuma LNG projects, respectively.
The Area 4 concession includes the operational Coral South Floating LNG (FLNG) facility, the planned Coral North FLNG development and the planned Rovuma LNG onshore facilities. This investment is ADNOC’s first in Mozambique and complements ADNOC’s efforts to expand its LNG portfolio.
The Coral South development is capable of producing up to 3.5mn tonnes/year of LNG, and represents the first facility of its kind in Africa. The proposed Coral North development is expected to produce another 3.5mn tonnes/year of LNG through an FLNG facility to process and liquefy natural gas for export.
The Area 4 concession is located offshore of the Cabo Delgado province of northern Mozambique and is operated by Mozambique Rovuma Venture, owned by ExxonMobil, Eni and CNODC, which holds a 70% interest alongside Galp Energia Rovuma, KG Mozambique and Empresa Nacional de Hidrocarbonetos, each of which holds 10% interest.
This acquisition follows ADNOC’s announcement on May 20 regarding its 11.7% stake acquisition in Phase 1 (Trains 1-3) of NextDecade Corporation’s Rio Grande LNG (RGLNG) export project in Texas. This marks ADNOC’s second major investment in the LNG sector this week, underscoring its strategic focus on expanding LNG capabilities globally.
Domestic expansion
ADNOC is also expanding its domestic LNG production capacity. The under-development Ruwais LNG project will feature two LNG liquefaction trains, each with a capacity of 4.8mn tonnes/year, totaling 9.6mn tonnes/year. This expansion is expected to more than double ADNOC LNG's production capacity, increasing it from 6mn tonnes/year to approximately 15mn tonnes/year.
Earlier this year, ADNOC announced the issuance of a Limited Notice to Proceed (LNTP) for early engineering, procurement, and construction activities to a consortium led by France's Technip Energies for the Ruwais LNG project.
Last week, the company signed a 15-year heads of agreement with German energy company EnBW for the delivery of 0.6mn tonnes/year of LNG, primarily sourced from its proposed Ruwais LNG project. This agreement represents the third long-term LNG supply contract secured for the project, following previous agreements with China's ENN and Germany's SEFE.
ADNOC had in January 2023 announced the formation of ADNOC Gas. It was listed on the Adu Dabhi stock exchange in March. The new entity undertakes processing, operations and marketing of natural gas. It combines the operations, maintenance and marketing of the ADNOC Gas Processing and ADNOC LNG businesses into one consolidated business.