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    Anadarko’s Mozambique LNG Project Hit


US company Anadarko's $20bn Mozambique LNG project has been attacked by insurgents.

by: Tim Gosling

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NGW News Alert, Natural Gas & LNG News, Africa, Exploration & Production, Investments, Financials, Mozambique,

Anadarko’s Mozambique LNG Project Hit

US company Anadarko has confirmed media reports filed late on February 21 that its $20bn Mozambique LNG project has been attacked by unidentified assailants.

Following a brief report by Portuguese newswire Lusa, Anadarko told Bloomberg in emailed comments that four people have been injured in the attack. Fifteen unidentified gunmen assaulted a convoy, the company said.

The attack marks the first action against the project since Islamist militants launched an insurgency campaign in the country in late 2017. The US company reiterated last month that it hopes to take a final investment decision on what it hopes will be Mozambique’s first onshore LNG project in the first half of this year.

Andarko is racing a rival Eni-ExxonMobil led project, Rovuma LNG, to claim that title, and hopes to be operational by 2023. The Mozambique LNG terminal would serve up LNG from the 12bn barrel equivalent Golfinho/Atum offshore fields, with an initially capacity cited at close to 13mn metric tons/y.

The attack will not make Anadarko’s efforts to put financing in place any easier, nor help developers in emerging markets. “You need the long-term contracts otherwise the lenders don’t want to know,” Andrew Seck, the US company’s vice president for LNG marketing & shipping told the European Gas Conference in Vienna in January.

On February 19, Andarko announced the latest in a string of major off-take contracts as it revealed a 20-year deal for 1mn metric tons/year has been signed with Indonesia’s Pertamina. Sale and purchase agreements are also in place with Cnooc, UK Centrica, Anglo-Dutch Shell and Tokyo Gas.

Anadarko holds a 26.5% stake in Mozambique LNG, with the remaining equity held by Japan’s Mitsui (20%), India’s ONGC Videsh (16%), Mozambique’s state-owned Empresa Nacional de Hidrocarbonetos (ENH) (15%), India’s Bharat PetroResources (10%), PTT Exploration & Production of Thailand (8.5%) and Oil India (4%).  

The strong roster is needed when working in a market such as Mozambique, suggested Paul Eardley-Taylor, from the Southern Africa Oil & Gas Unit at Standard Bank. He pointed out at the Vienna conference that “contracts etc are completely overshadowed by country risk”. Anadarko hopes to raise two-thirds of the financing for Mozambique LNG via debt.

Mozambique LNG is situated in an area on the Tanzanian border where insurgency is reported to have resulted in the deaths of over 100 people and destroyed hundreds of homes. The militants have mainly concentrated on civilian and government targets.

However, Anadarko put out a local advert for armoured vehicles last month, the Bloomberg report notes. The company said the equipment was vital to allow the project to go forwards.

“We have received information that a convoy was attacked on the road from Mocimboa da Praia to Afungi,” Anadarko told the newswire. “The event is over, and work is under way to account for all personnel.”