Anadarko FID on Mozambique LNG “by next year”, start production “around 2022 or 2023”

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Anadarko FID on Mozambique LNG “by next year”, start production “around 2022 or 2023”

2:38 CAT | 17 Sep 2016

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The Houston-based Anadarko Petroleum Corporation may take its final investment decision on a massive liquefied natural gas (LNG) project in northern Mozambique “by next year”, according to the company’s Chief Executive Officer, Al Walker, cited in Friday’s issue of the ‘Houston Chronicle’.

Anadarko has repeatedly postponed the final investment decision on the project, estimated to cost US$15 billion.

When Anadarko discovered large reserves of gas in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, six years ago, the market for LNG was beginning to boom. Now there is no shortage of LNG for the major Asian consumers, making it look as if Anadarko, and Mozambique, may have missed the bus.

Walker, however, remains optimistic. He estimates that Anadarko could start producing LNG in 2022 or 2023 (much later than initial projections of 2019), which might be “just the right time”. Energy research companies believe that is when global economic growth will have revived enough to spur a fresh wave of demand for LNG.

So, “depending on the market”, Anadarko may make its final decision by 2017, said Walker, and “that could put the project on track to begin shipping gas as global supplies dwindle”. The amount of gas is enormous – Anadarko estimates that Rovuma Basin Offshore Area 1, where it is the operator, contains at least 75 trillion cubic feet of recoverable gas reserves.

Walker said Anadarko has “all but completed” a key part of its negotiations with the Mozambican government, which is an agreement on resettling families living in fishing villages in the Afungi Peninsula, where the LNG factory will be built. Anadarko has submitted its resettlement plan (which will cost around US$300 million) and is awaiting the government’s approval.

Walker said that the resettlement agreement, and several other unfinished contracts, are among the reasons he met Mozambican President Filipe Nyusi on Friday at the Anadarko Houston offices.