ENH again postpones going to the markets to finance Rovuma Basin Area 1 LNG project – report

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ENH again postpones going to the markets to finance Rovuma Basin Area 1 LNG project – report

4:04 CAT | 15 Nov 2019

Photo: O País

The National Hydrocarbon Company (ENH) has postponed its return to the overseas market with a view to raising about US$2 billion to fund its participation in the Rovuma Basin Area 1 gas project. After July and September, December is the new deadline.

ENH, the Mozambican state’s “business arm” in the oil and gas business, needs about US$2 billion to fund its 15% share in the liquefied natural gas (LNG) project in Rovuma Basin Area 1 , in Cabo Delgado, where French Total as the consortium leader.

Following the US$23 billion Final Investment Decision (FID) by the operators of this block (led at the time by Anadarko) last June 18, the National Hydrocarbon Company pledged to raise the necessary funding in July, and then postponed it to September.

At the time, chairman Omar Mithá justified the postponement on the grounds of market issues, the company choosing to await better financing conditions.

July and September having passed, Mitha told “O País” exclusively this Thursday that the presentation to the market was now postponed to December.

“We discussed the issue at the Africa Investment Forum (recently held in South Africa). We will have to refine some factors with the operator and other partners. We plan to return to the market in December or even late January due to the holidays,” Mithá explained.

Asked if the company would follow the same funding model for the Area 4 project (also in the Rovuma basin) led by US Exxon Mobil, the National Hydrocarbon Company chairman said it was too early to advance any position, given that the Area 4 operators have not yet made their final investment decision.

Omar Mithá was speaking on the sidelines of the 6th Mozambique Gas Summit, which ended yesterday in the Mozambican capital, Maputo. The event brought together over 600 experts from 55 countries and heard 55 speakers.

Area 4 FID scheduled for April 2019

After constant setbacks, US oil giant Exxon Mobil and its partners in area 4 of the Rovuma basin, northern Mozambique, have scheduled their final investment decision for April next year.

The US$25 billion investment in the so-called ‘Mamba Complex’ liquefied natural gas project has already been approved by the Maputo Executive.

“We are currently getting the latest details on how much gas will be supplied domestically by this project,” said ENH Board of Directors member Benjamin Chilenge said at the gas summit.

Regarding the implementation stage of the Area 1 Coral South and Mozambique LNG projects, ENH senior staff said they very advanced.

The FID for the Coral South project, which is led by the Italian Eni, was taken in June 2017, in an investment of US$8 billion. In the Mozambique LNG block, which now has French Total as the consortium leader, the investment was approved in June 2019, and totals US$23 billion.

“We are talking about an investment volume of over US$60 billion over the next decade,” said Benjamin Chilenge, talking about the role of gas in the development of Mozambique’s industrialisation and future energy transition.

By Edson Arante

Source: O País