Bad weather leaves 32,000 homes and businesses without electricity in central Mozambique districts
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Anadarko’s vice president and Mozambique director, Steve Wilson, yesterday reaffirmed his company’s commitment to investing in natural gas in Mozambique, but said that “there is still much work to do” before any final decision is taken.
“We have [sales] arrangements that we just need to formalise, then we move on to the financing project”, followed by approval processes before the final decision, he told reporters in the sidelines of a conference in Maputo.
US-based Anadarko leads the consortium for Area 1 natural gas exploration in northern Mozambique, the largest investment in the country’s history.
Wilson yesterday announced new investments in support of work on the Afungi peninsula so that the construction of the natural gas liquefaction plant can proceed “swiftly” when the decision comes, but considers it “difficult to say” when that final announcement will be made .
He emphasised the progress made with the government regarding the legal framework and the approval of plans.
Even so, “there is still a lot of work to do, many approvals to obtain”, including at other levels, he said, concluding that the “final investment decision will come when it has to come”.
The US oil company has announced in recent months agreements for pre-priced sales contracts for the gas it will extract offshore, bring onshore, and liquefy in Mozambique in the coming decades.
In February, Anadarko announced it had guaranteed the sale of 5.1 million tonnes per year, but only when it signed contracts for the sale of 8.5 million tonnes per year would it make the decision to invest, according to the Bloomberg financial agency.
Steve Wilson announced today the advance of three support investments – an airstrip, a highway and more housing for workers – as part of ongoing work in northern Mozambique.
The Area 1 natural gas megaproject includes a natural gas liquefaction plant, and the “three major projects will allow us to start construction swiftly as soon as the final investment decision is made,” Wilson said.
One of the projects consists of the construction of a highway between Palma, district headquarters, and Afungi, the site of the factory.
“We’ve cleared land to build 14 kilometres of road with two lanes” in each direction, he said.
Concerning proposals for the construction of an airstrip, Wilson said a decision would be made “at the end of the second quarter”.
A third project is also underway to triple housing for construction workers from 400 to 1150 beds.
At the same time, the work of resettlement the 1,500 people who live in the area is underway “with the greatest respect for the population,” Wilson stressed.
“All this demonstrates the commitment of Anadarko and the Area 1 consortium to this project, because everything is being done before the green light of the final investment decision,” he said.
Anadarko leads the group of companies that will exploit the natural gas found 40 kilometres off the coast of Cabo Delgado in the far north of Mozambique on the border with Tanzania.
After drilling, the gas will be piped to the Afungi peninsula, where it will be converted into liquid and conveyed to cargo ships for export. The plan foresees two liquefaction lines, installed on land, with a total production capacity of 12 million tons of LNG per year.
At this stage, the project involves financing of around US$12 billion.
The Area 1 consortium consists of North America’s Anadarko, which holds a 26.5 percent stake, Japan’s Mitsui (20 percent), Indian ONGC (16 percent), the Mozambican state oil company ENH (15 percent), two Indian companies – Oil India Limited (4 percent) and Bharat Petro Resources (10 percent), and Thai company PTTEP (8.5 percent).
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