Government, Area 4 operators close to agreement

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Government, Area 4 operators close to agreement

12:28 CAT | 29 Mar 2019

in file CoM

The impasse in negotiations between the Maputo government and the consortium led by ExxonMobil and Eni in the Rovuma Area 4 gas exploration project is expected to reach resolution in the coming weeks.

Minister of Mineral Resources and Energy Max Tonela announced imminent agreement between the government and Rovuma basin Area 4 operators, making viable the billion-dollar liquefied natural gas (LNG) project.

“In the coming weeks, after almost five months of discussions around the document, we will approve the LNG development plan presented by the consortium,” he said.

This is a crucial document for taking hydrocarbons exploration final investment decisions in Area 4 of the Rovuma basin, the deadline being the first quarter of 2019.

Decisions did not move forward in the period originally anticipated following the withholding of government approval for the first draft of the gas development plan presented by the oil companies in July 2018, on account of its many gaps and breaches of requirements.

One of the points of contention between the Mozambican government and the consortium led by ExxonMobil and Eni, has to do with limitation of gas extraction in Area 4.

In the development plan presented to the government, the oil companies require between 21 and 22 trillion cubic feet (TCF) of gas to feed their offshore project, quantities below the limit authorized by the government.

Newspaper O País has established that five trillion cubic feet of gas will come from the Coral South complex, and the Mamba complex will produce between 16 and 17 TCF, fulfilling the total amount required.

Quizzed on the matter, Minister Tonela confirmed the impasse but did not, however, say whether consensus had been reached between the parties.

“What is of interest at the moment is to ensure that part of the gas being exploited feeds the domestic market. This is what must happen and is being negotiated,” the minister said.

According to Mozambique Rovuma Venture (MRV) company, ExxonMobil will lead the construction and operation of the liquefaction and associated infrastructures onshore, while Italy’s Eni will lead the construction and operation of the upstream infrastructure – the extraction of gas from the seabed and its delivery to the factory.

MRV also has besides ExxonMobil, Eni and CNODC who jointly hold 70 percent of the Area 4 concession, with three remaining 10 percent tranches held by Kogas, Galp Energia and Empresa Nacional de Hidrocarbonetos (ENH).

By Edson Arante

Source: O País