Mozambique LNG, Africa’s largest energy development group, is in talks with Indian companies to supply Liquefied Natural Gas to the country, a senior executive said here today.
“We are working together with them (the Indian partners) and discussing markets in India,”said Steve W Hoyle, vice president LNG Marketing & Shipping at Anadarko Petroleum Corp of the US, a leading proponent of the project.
“We will be excited to sell LNG to India,”he said, pointing out that Oil and Natural Gas Corp, Bharat Petroleum and ONGC Overseas Ltd, together holds 30 per cent equity in the project.
“They are the largest (energy) players in India,” said Hoyle when asked about LNG marketing plan for the Indian market.
Hoyle, who addressed 200 delegates at the “LNG Supplies for the Asian Markets 2016” conference, leads the LNG marketing of the multi-party owned concession with a large deposit of natural gas reserves to support 50 million tons a year of LNG production at peak.
Mozambique LNG is strategically located close to India in terms of gas shipments, with one-way ship journey of to Northern India in seven days compared to 17 days trip to Japan, the world’s largest LNG import market.
The mega project, in various stages of developments, is expected to seek sales and purchase agreements (SPAs) with Asian LNG importers, including India.
“We can expect at least five-to-10 year LNG import contracts into the Indian market, as such long-term SPAs are required to secure financing support for the project’s USD 20 billion development cost,” said an industry source.
“It is still early to indicate the total volume of LNG shipments to India,” the source added.
The project is expected to ship out first cargo from 2020, according to the source.
Mozambique LNG project will need strong support from its stake holders to work on the massive multi-billion dollar financing based on long-term SPAs with the Indian and Japanese markets, the source said.
“LNG markets have become very challenging, given that leading buyers are opting for spot cargoes from the large number of exporters globally,” the source said.
Anadarko leads Asian investors in the project in the Offshore Area 1 Block with 26.5 per cent interest.
The partners include Mitsui, PTTEP along with the three Indian energy groups as well as National Oil Company Empresa Nacional de Hidrocarbonetos of Mozambique.
Source: Business Standard