Mining & Energy
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A Bharat Petroleum oil pump station displays the price of unleaded petrol (0.89$) and Diesel (0.66$) as a pedestrian walks past in New Delhi, India, February 3, 2016. File photo: Reuters
The Indian state-owned company Bharat Petroleum Corporation Ltd (BPCL) is reported to be on the verge of signing a Sales and Purchase Agreement covering a million tonnes of LNG per annum from the consortium Mozambique LNG1.
Mozambique LNG1 is owned by the Texas-based company Anadarko and its partners in the consortium developing the infrastructure to extract and process natural gas from Offshore Area One in the northern province of Cabo Delgado.
Anadarko has recently announced that it has entered into Sales and Purchase Agreements with Shell, Tokyo Gas and Centrica, and the Chinese oil company CNOOC. In total, it now has binding sales agreements covering over 7.5 million tonnes per annum (mtpa) of LNG. It is expected that the Mozambique LNG1 consortium will take its Final Investment Decision once it has reached 8.5 mtpa worth of sales, which will happen once BPCL formally signs the agreement. In addition, last November the consortium reached a provisional agreement with Thailand’s PTT for the purchase of 2.6 mtpa and it is just awaiting formal approval from the Thai government.
According to the news agency LiveMint, a BPCL company official confirmed that the decision has been made to import liquefied natural gas from Mozambique. Thus, Mozambique LNG1 looks very much on track to take its Final Investment Decision by April this year. This will enable the consortium to put in place the finance for the construction of two LNG factories on the Afungi Peninsula in Palma district. The plant will produce a total of 12.88 mtpa of LNG with exports expected to begin in 2024. Anadarko intends to expand the project in stages up to a maximum of 50 million tonnes a year. In addition, Area One will supply 100 million cubic feet of natural gas per day for domestic use in Mozambique.
Offshore Area One is estimated to hold 75 trillion cubic feet of recoverable natural gas. Anadarko is the operator with a 26.5 per cent working interest. Its partners are Mozambique’s National Hydrocarbon Company ENH (15 per cent), the Japanese company Mitsui (20 per cent), the Indian companies ONGC Videsh Ltd, Beas Rovuma Energy Mozambique Ltd and BPRL Ventures Mozambique (with 10 per cent each), and PTTEP of Thailand (8.5 per cent).
BPRL is the upstream arm of Bharat Petroleum Corporation Ltd.Source: AIM
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