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    Mozambique LNG Project Sells Out

Summary

The plant will be designed to produce 15.2mn mt/yr of LNG.

by: William Powell

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Complimentary, NGW News Alert, Natural Gas & LNG News, Africa, Corporate, Exploration & Production, Import/Export, Investments, Political, News By Country, Mozambique

Mozambique LNG Project Sells Out

The co-venture participants in the Mozambique Area 4 project have secured liquefied natural gas (LNG) offtake commitments from affiliated buyer entities of the partners, said downstream plant operator ExxonMobil December 28.

The seller-buyer relationship mirrors that of Shell-operated LNG Canada project, which took its final investment decision (FID) on the basis of each partner finding a market for its share of the output nearer the time. Major LNG buyers are increasingly wary of committing to buy LNG on a long term contract, as competition both between rival suppliers and between gas and other forms of energy heats up. 

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ExxonMobil said the agreements were "a key milestone enabling the participants to rapidly move toward FID in 2019 on the first phase of the Rovuma LNG project." Area 4 participants are ExxonMobil; Italian Eni, which will operate the upstream part; China National Petroleum Corporation (CNPC); state Empresa Nacional de Hidrocarbonetos (ENH); Korea's Kogas; and Portugal's Galp.

Those commitments are subject to the conclusion of fully-termed agreements, which will be finalised and initialed in the next weeks, and the approval of the government of Mozambique.

“The Rovuma LNG marketing team has worked at an accelerated pace to reach this important milestone, a tremendous achievement made possible by the strength of the Area 4 co-venture parties and the support of the government of Mozambique,” said the president of ExxonMobil Gas and Power Marketing Company, Peter Clarke.

Eni chief gas and LNG marketing and power officer Massimo Mantovani said: “These commitments are an important step forward for the Rovuma LNG project and provide a solid foundation for securing project financing. This achievement highlights the strength of our partnership and commitment to developing Mozambique’s natural resources.”

In July 2018, Mozambique Rovuma Venture submitted the development plan to the government of Mozambique for the first phase of the Rovuma LNG project. The project will produce, liquefy and market natural gas from the Mamba fields  in the Area 4 block in the Rovuma Basin offshore Mozambique. ExxonMobil will lead construction and operation of natural gas liquefaction and related facilities on behalf of the Area 4 joint venture, and Eni will lead construction and operation of upstream facilities.

The development plan for the first phase of the Rovuma LNG project specifies the proposed design and construction of two liquefied natural gas trains, which will each produce 7.6mn metric tons/yr of LNG. Mozambique Rovuma Venture is currently holding productive discussions with the Mozambican government on development plan details.

In addition to generating government revenues, the proposed Rovuma LNG project will support long-term economic growth in Mozambique by developing the local workforce, building the capabilities of and demand for local suppliers, and assisting with community development efforts, said ExxonMobil.

Mozambique Rovuma Venture, an incorporated joint venture owned by ExxonMobil, Eni and CNPC, holds a 70% stake in the Area 4 exploration and production concession contract alongside ENH, Galp and Kogas, each of which have 10%.

It appears to have stolen a march on another LNG project in Mozambique, operated by US Anadarko, which expects to take FID in the first half of 2019, but has not yet made a similar announcement on sales.