India's BPCL Inks Deal to Buy Mozambican LNG

Anadarko Petroleum said February 15 that Mozambique LNG1 Company, the jointly owned sales entity of the Mozambique Area 1 co-venturers, has signed a sale and purchase agreement (SPA) with Bharat Gas Resources, a wholly owned subsidiary of India’s BPCL.

According to the SPA, the Indian entity will buy 1mn metric tons/year of LNG for a term of 15 years.   

"In addition to BPCL being an upstream equity co-venturer in the Mozambique LNG project, we are also pleased to have them as one of our foundation customers," said Mitch Ingram, Anadarko executive vice president, International, Deepwater & Exploration. "With this agreement, Mozambique LNG now has executed more than 8.5mn mt/yr of SPAs. India's role in the global LNG market will continue to grow with Mozambique LNG being a natural supplier given its geographic proximity and 30-percent Indian state-owned interest in Mozambique LNG. We are grateful to BPCL for its support of Mozambique LNG and look forward to providing a long-term, reliable source of cleaner energy for many years to come."

In addition to BPCL, in the recent weeks, Mozambique LNG1 Company has signed SPAs with Tokyo Gas, Centrica LNG, Tokyo Gas and Cnooc.

The Anadarko-operated Mozambique LNG project might be Mozambique's first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 12.88mn mt/yr to support the development of the Golfinho/Atum fields entirely within Offshore Area 1. A final investment decision for the project is expected in the first half of this year. 

There is another LNG project, Rovuma LNG, operated by Italian Eni (upstream) and ExxonMobil (midstream), which has sold out its cargoes, with the partners also the buyers. But it has not yet formally announced FID either.

Anadarko Mozambique Area 1, a wholly owned subsidiary of Anadarko, operates Offshore Area 1 with a 26.5% working interest. Co-venturers include ENH Rovuma Area Um (15%), Mitsui E&P Mozambique Area1 (20%), ONGC Videsh (10%), Beas Rovuma Energy Mozambique (10%), BPRL Ventures Mozambique (10%), and Thai PTTEP Mozambique Area 1 (8.5%). Shell had tried to buy a stake in the project company from Cove, but was outbid by the Thai upstream company.