Will BP terms push ENI Mozambique FLNG to FID?

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Will BP terms push ENI Mozambique FLNG to FID?

8:24 CAT | 05 Oct 2016

O País / Head of Mozambique's ENH Omar Mitha, third from the left, joins hands with representatives of share holders in Coral FLNG project and BP in a group photo after signing the agreement yesterday on London

ENI is under new pressure to finalise its Mozambique offshore LNG project Coral FLNG with the announcement today that BP will buy 100 per cent of project output in a 20-year deal that is conditional on the project reaching a final investment decision (FID) this year.

BP issued a statement, announcing the terms of its sale and purchase deal with ENI East Africa and its Area Four concession partners Galp, Korea Gas Corp and Mozambique energy company Empresa Nacional de Hidrocarbonetos. BP was already known to have contracted the project’s entire 3.4 million tonne a year output.

The news confirms that the project is now weeks away from making its critical decision. ENI has been meeting financiers to secure backing for the deal and is said to be negotiating a US$2.5 billion order for a floating LNG newbuilding with South Korea-based Samsung Heavy Industries.

BP said: “The agreement, which has been approved by the government of Mozambique, is conditional on the FID being taken for the project, which is currently expected by the end of 2016… BP will use LNG from the contract to help meet its global supply commitments.”

BP has not disclosed the commercial arrangements. ENI had hoped to start production on the US$7 billion offshore project by 2019. That deadline is now likely to overrun.

By: Karen Thomas

Source: LNG World Shipping