Coral FLNG on Home Straight, says Galp
Portuguese oil and gas group Galp reported late November 28 net income for the first nine months of 2016 of €361mn, down 26% (or €129mn) year on year, due to €215mn of non-recurring upstream impairments. But it indicated that its Coral project in Mozambique is nearing the finish line.
Pre-tax earnings (Ebitda) declined by 17% to €1,015mn on a replacement cost. Galp said all its three business segments – upstream, gas & power, and refining/marketing - earned less, impacted respectively by lower oil and gas prices, a decline in gas volumes sold, and lower refining margins. Galp’s average oil and gas sale price was 31% lower at $33.9/boe.
Galp completed the sale of 22.5% of its gas distribution business October 27 to Meet Europe, owned 50-50 by Japan’s Marubeni and Toho Gas for €141 mn, based on an initially agreed price plus adjustments. The divestment was first announced in July 2016.
Galp’s traded 9M gas/LNG volumes this year of 2.47bn m3 were 21% lower (9M2015: 3.12bn m3). That included 20 LNG cargoes sold up to September this year (seven fewer than in 9M2015).
Inclusing 2.73bn m3 sold to direct clients (down 4%), that meant Galp's overall 9M gas sales were 13% lower this year at 5.2bn m3.
Coral FLNG partners are 'finalising commercial agreements'
In Mozambique, Galp of the Coral floating LNG project, in which it is a 10% partner: “The consortium is finalising the remaining commercial agreements and negotiating the project finance for the project.”
Galp did not say if its own board had yet given the project the green light. Eni and Mozambican state ENH’s boards have, and Eni has said it hopes for a final investment decision on Coral by end-2016.
Regarding the larger Mamba onshore LNG project, Galp said engineering, procurement and construction (EPC) proposals continue to be analysed for the upstream/midstream solutions. Galp’s 10% stake is the same for both Eni-led Area 4 gas projects (the 3.3mn t/yr Coral and initial 10mn mt/yr Mamba onshore project).
Mark Smedley