Mozambique: Cahora Bassa moves ahead with large scale 400 MW solar plant
Upstream / Mitch Ingram
US player Anadarko Petroleum remains some time away from taking a final investment decision on its long-delayed Mozambique liquefied natural gas project.
Before Anadarko can consider finalising LNG sales and purchase agreements and funding arrangements for the two-train project, the government needs to approve a legal and contractual framework and its resettlement plan.
Mitch Ingram, head of LNG at the Houston-based independent, told analysts this week: “We have made significant progress on important government agreements.
“A key suite of agreements — that we term the legal and contractual framework — have been (submitted) to government and we expect approval of those in the near term.
“We are also well advanced with our planning and preparation for resettlement.
“We submitted the plan to government in June and after a few months of discussions that plan has been accepted and we await approval in the near future.”
Ingram explained that when both these issues have been resolved “that will allow us to progress further converting our LNG heads of agreement into sales and purchase agreements and we’ll also take forward our arrangements for project finance”.
Anadarko has not specifically said when it is targeting a final investment decision for Mozambique LNG but the end of next year is widely thought to be likely goal.
First gas from phase one of Anadarko’s multi-train LNG project, which comprises two trains each able to produce 6 million tonnes per annum of LNG, is expected in 2020 to 2021.
Initial gas feedstock will come from the Golfinho-Atum complex in Area 1 that Anadarko operates with a 26.7% stake.
Anadarko’s chief executive Al Walker told analysts he would not be averse to selling off this stake but also pointed out that staying on as operator could be a good move for the company.
“If someone decides they like it better than we do or see more value than we do, we’re not married to it any more than we’re married to any other asset in our portfolio.
“However, we do believe that if we do take it to a final investment decision, it will be a game-changer for Anadarko.”
He added that, to date, Anadarko, through farm-outs and the like, has extracted $300 million more from its Mozambican assets than it has invested.
Anadarko awarded the CCS joint venture of CB&I, Chiyoda and Saipem a contract to engineer, procure and construct the initial two trains at Afungi in early 2015.
Last week, Philip Asherman, CB&I’s chief executive, said: “In 2017 we expect Mozambique LNG will have reached final investment decision (and it) will slide towards the end of 2017.”
At the same Afungi site, Italian major Eni also plans to have two LNG trains constructed and in May this year received commercial bids from a JGC-Fluor pairing, a team of Technip, Samsung Engineering and China Huanqiu Contracting & Engineering — an affiliate of China National Petroleum Corporation, which has a stake in Area 4 — plus the CCS consortium.
Asherman said: “We expect that Eni will select the contractor group in 2017 and we feel confident that our proposed joint venture is in a strong position going forward.
“We think Eni is going to get more active, but you won’t see anything, I think, really positive there for another year.”
Eni also continues to work on its 3.3 million tpa floating LNG scheme, fed by gas from the Coral field in Area 4 and to be built by a consortium of Technip, Samsung Heavy Industries and JGC.
A final investment decision is still earmarked for this year with only project financing to be concluded, said Massimo Mondazzi, Eni’s chief financial officer.
Speaking to analysts, he said: “The last step towards the final investment decision is a final commitment on project financing.
“The process is very mature. We’re (securing) commitments from all the involved banks.
“This process will take some weeks to be completed and, at that time, we will be ready to take the final investment decision.”
Technip chief executive Thierry Pilenko told analysts last week: “I believe a final investment decision on this project should happen pretty soon.
“We have been involved with hundreds of engineers on this project over the past few months to make the design and the cost more robust.”
Eni has been in farm-out talks to offload part or all of its stake in Area 4 to ExxonMobil with industry sources suggesting the supermajor was only interested in the Mamba-to-onshore LNG scheme but not Coral.
However, Mondazzi told analysts last week that any deal would involve the whole of Area 4, not parts of it.
“Definitely, I would say that the only solution in terms of disposal in Area 4 is a unique disposal without any carve out.
“There is no sense to carve out Coral or any other piece of the full development picture.”
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