US ExImBank Backs Mozambique LNG
US Export-Import Bank (Exim) voted September 26 to authorise a $5bn loan to support American exports for the development and construction of a liquefied natural gas (LNG) project in Mozambique. Although Occidental is expected to soon sell its African assets to French major Total, the US content requirement of the contract supported by Exim will continue to apply.
Exim's directors, after sitting in Washington DC, unanimously agreed to back the loan for export of goods and services for the LNG facility previously led by US independent, Anadarko before the company was acquired by Occidental Petroleum Company in May. Occidental has in turn, agreed to sell the Mozambican project, along with Anadarko's other African assets to Total.
In a statement, Exim said that the financing will support US exports of goods and services for the engineering, procurement, and construction of the onshore LNG plant and related facilities. It will also help create jobs in the US and Mozambique while contributing to boost the southern African country's economy.
Exim chairman Kimberly Reed said: "In addition to supporting our U.S. workers here at home, there also is little doubt that this transaction will be transformative for the people of Mozambique. It is currently forecast that the life of project will have a net benefit of more than $60bn, which is more than four times the current gross domestic product of Mozambique. In addition, the project is obligated to provide domestic gas, which will support the expansion of electric generation capacity and the development of other industries in the country. LNG production will be a transformational catalyst for Mozambique's economic growth and fiscal revenues."
Anadarko announced, in June, final investment decision for the $20bn, 12.88mn metric tons/yr project to be fed by gas from offshore Area 1 in the Rovuma Basin, northern Mozambique. The concession is about 10,000 km² and has an estimated 75 trillion ft³ of gas. By early May, the project had clinched long-term sales and purchase agreements totaling 11.1mn mt/yr.
Exim said in the statement that the borrower is Mozambique LNG1 Financing Co., which is owned by the project's shareholders.