WGC: Mozambique LNG Projects Move Closer to FID
WASHINGTON DC – Two projects involving offshore gas production and onshore liquefaction in Mozambique are moving closer to their final investment decisions, the backers said June 27 at the World Gas Conference (WGC) here. If fully developed they could produce 50mn mt/year of LNG.
US major ExxonMobil and Italian explorer Eni said they are close to signing binding LNG offtake agreements for the Rovuma LNG project, which will rely on feedstock from Area 4 block offshore Mozambique.
Senior management representatives of the co-venture parties – ExxonMobil, Eni, Chinese CNODC, domestic state oil company ENH, Kogas and Portuguese Galp – met June 27 during WGC in Washington, DC to affirm marketing progress.
“We have made significant progress on marketing and are now in active negotiations on binding sales and purchase agreements for Rovuma LNG with some affiliated buyer entities of the Area 4 co-venturers,” the president of ExxonMobil Gas and Power Marketing Company Peter Clarke said at WGC. “These commitments will help us progress toward a final investment decision, which we expect to reach in 2019.”
The initial phase of the Rovuma LNG project will develop the Mamba reservoirs in Area 4 and help deliver reliable, affordable energy to customers and create long-term economic value for the people of Mozambique and the project’s co-venturers.
ExxonMobil will lead construction and operation of liquefaction trains and related onshore facilities for the Rovuma LNG project, while Eni will lead upstream developments and operations. In parallel to the marketing, the co-venturers are also advancing financing activities and working with the government of Mozambique to progress approval of the project.
“The key strength of Area 4 is the quality of the co-venture partnership,” said Eni's chief gas marketer Massimo Mantovani. “Following the final investment decision on Coral South FLNG in 2017, we are working together to develop the remaining gas fields which will feed the Rovuma LNG trains, taking full advantage of the expertise of all our co-venture parties.”
Eni took FID on the much smaller floating LNG Coral plant earlier this year.
Anadarko still on track
Area 4 is offshore of the Cabo Delgado province of northern Mozambique and operated by Mozambique Rovuma Venture. The other project, Area 1, is operated by Anadarko. The US company's international upstream operations head, Mitch Ingram, told the conference earlier in the day that LNG projects were "now in the sweet spot" and a number of them would take final investment decisions in the next few years, including his own in the second half of next year. He said that the resource, the location and the deliverability of the wells all meant it would be very cost-effective LNG, coming in at below $600/mt/yr.
Both projects involve onshore liquefaction. Area 1 has committed 6.7mn mt/yr in sales, the LNG to be sold ex-ship, meaning the destination is not flexible.