Anadarko And Eni Reach Agreement On Shared Resources

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Anadarko And Eni Reach Agreement On Shared Resources

8:12 CAT | 04 Dec 2015

Claudio Descalzi (Eni's Ceo) and Mitch Ingram (Anadarko's executive vice-president for global LNG).

The Anadarko Petroleum Corporation of the United States announced on Thursday that it has signed a “Unitization and Unit Operating Agreement” with the Italian energy company ENI, for the development of the huge deposits of natural gas in the Rovuma Basin, off the coast of the northern Mozambican province of Cabo Delgado.

Anadarko is the operator for Rovuma Basin Offshore area one, while ENI is the operator for Area Four. The natural gas deposits do not obey man-made boundaries, and straddle the boundary between the two areas – hence exploiting these resources required an agreement between the two companies.

Anadarko says that two of the fields it has discovered, Golfinho and Atum, lie entirely within Area One, but two other fields, Prosperidade, and Mamba, lie partly in Area One and partly in Area Four.

An Anadarko Thursday press release, citing Mitch Ingram, the company’s Executive Vice President for Global LNG (Liquefied Natural Gas), said that the agreement with ENI “is fair, equitable and consistent with best industry practices”.

Under the agreement, reached with the cooperation of the Mozambican government, the two fields that straddle Areas One and Four “will be developed in a separate but coordinated manner by the two operators until 24 trillion cubic feet (Tcf) of natural gas reserves (12 Tcf from each Area) have been developed”.

“All subsequent development of the Unit will be pursued jointly by the Area 1 and Area 4 concessionaires through a joint-venture operator (50:50 Anadarko and Eni)”, the release added. This agreement is subject to final approval by the government.

In the same release, Anadarko announced that it has signed a memorandum of understanding with the government to provide gas for Mozambique’s domestic use from its LNG development. Under this agreement, Anadarko says, “Area 1 will provide initial volumes of approximately 50 million cubic feet of natural gas per day (MMcf/d) per train (100 MMcf/d) for domestic use in Mozambique”. A “train” is the term for a factory producing LNG. In the initial phase, Anadarko and its partners are expected to build at least two LNG trains onshore on the Afungi Peninsula in Palma district, the nearest point on the mainland to Area One.

“The natural gas will be provided at pricing that is fair to all parties and supports local natural gas development, and the concessionaires are prepared to sell up to 300 MMcf/d of additional volumes into the domestic market in future years as projects are matured and commercial terms agreed”, adds the Anadarko release.

“Signing this MOU is an important step,” added Ingram. “We look forward to continuing to work with the Government of Mozambique to finalize the legal and contractual framework that will enable us to deliver natural gas for domestic projects and LNG cargoes for export to premium markets around the world, both of which will benefit Mozambique through a reliable source of cleaner energy and significant revenue generation.”

Source: AIM