Monday 31 July 2017

Mozambique LNG moves one step closer to FID



On 31st July, Anadarko finalised two agreements with the Mozambique government (the marine concessions) which pave the way for FID of the LNG project. The agreements would allow Anadarko as operator to progress with the design, building and operation of the marine facilities for the project and could see FID in 2018. The next step is to begin with resettlement plans, the completion of which would allow construction to commence.

Separately, the partners continue with efforts to secure long-term offtake contracts and the high proportion of offtake by equity holders of the licence reduces the risk surrounding the project. Asian players Mitsui (20%) and PTTEP (8.5%) have a need to source long term gas supply, as do the Indian participants ONGC (16%), Oil India (4%) and Bharat (10%). The remaining Area 1 licence holders are Anadarko (26.5%) and ENH (15%).

Area 1 is estimated to hold c.75tcf of recoverable gas and will initially have two LNG trains at the proposed onshore processing plant with 12mtpa capacity for the Golfinho/Atum field. The scale of the resources does pose a threat to upcoming global LNG developments, particularly Australian projects which also target the Asian gas markets, and could see a glut in the 2020s particularly with Qatar also looking to up its LNG exports.

Earlier this month saw Petronas cancel its large Pacific NorthWest LNG project on the west coast of Canada.

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