Anadarko Reaches "Milestone to Mozambique FID"
Anadarko said July 31 it had finalised two agreements with the Mozambican government – together known as the "marine concessions" – that would allow it to design, build and operate the marine facilities for its LNG project in northern Mozambique.
It follows the publication of the Mozambican government decrees approving those agreements.
"This is a key milestone on the path to a final investment decision (FID) for our initial two-train LNG project," said Mitch Ingram, Anadarko executive vice president, Global LNG. "It marks the completion of the core components of the Legal and Contractual Framework with the government. We will now look ahead with our plans to begin resettlement, which will enable the construction of the LNG plant. In addition, we continue to make good progress with our efforts to secure long-term LNG sales and purchase agreements (SPAs) with premier buyers, and we will intensify our work to put in place the necessary financing for the project. We expect to take FID once the SPAs and financing are in place."
Anadarko is developing Mozambique's first onshore LNG plant consisting of two initial LNG trains with a total capacity of 12mn metric tons/yr to support the Golfinho/Atum field located entirely within Offshore Area 1. Anadarko and partners have discovered some 75 trillion ft3 (2.12 trillion m3) of recoverable natural gas resources in offshore Area 1.
Anadarko operates Mozambique offshore Area 1 with a 26.5% interest. Co-venturers include Mozambican state owned ENH 15%, Japan's Mitsui E&P 20%, Indian trio ONGC Videsh 16%, Bharat PetroResources 10% and Oil India 4%, plus Thai state upstream firm PTTEP 8.5%.
Eni and partners announced final investment decision June 1 for their Coral South FLNG project, the initial project that will use offshore Area 4 resources where they have discovered some 85 trillion ft3 .
Anadarko's statement included no firm timeline for its Area 1 LNG export projects. However, given that Coral is expected to export its first LNG in 2022, it's probable that the first LNG shipped from Anadarko's onshore LNG plant will be no earlier than the mid-2020s.
Asked if it could give guidance on when FID or start-up might occur, Anadarko told NGW: "We remain confident that Mozambique LNG will secure sufficient sales to support a FID. New supply projects must come on-stream to meet future long-term demand for cleaner energy. Additionally, lenders are keenly engaged and have indicated a willingness to support the project with unprecedented levels of project finance commitments, which speaks to the strength of the project given Mozambique's current macroeconomic challenges.
"Mozambique LNG is well positioned to deliver LNG early next decade to take advantage of a projected sweet spot in global supply and demand."
Mark Smedley