Africa Commodities Economy FDI Gas Mozambique Natural Resources

Anadarko in talks with nine Indian firms to sell gas from Mozambique

Anadarko Petroleum Corp. is in talks with nine Indian companies to sell gas from Mozambique’s Rovuma basin, two people aware of the development said.

The US-based energy company, holding 26.5% stake in Rovuma, is the operator of the block. Gas from the basin is expected to flow from 2022-23, against an earlier estimate of 2019.

“We are in the last leg of gas marketing and the final investment decision will be taken when the final marketing and financing arrangements are wrapped up. We are in talks with a number of companies in India. We think India will be a big market for LNG in the future,” the first of the two people cited above said on condition of anonymity.

The consortium is in talks with Petronet LNG, Oil and Natural Gas Corp., Hindustan Petroleum Corp. Ltd, Bharat Petroleum Corp. Ltd and Gujarat State Petroleum Corp. among others, the second of the two people cited above said, also on condition of anonymity.

On 20 February, Anadarko signed a deal with Électricité de France, S.A. (EDF) of France to supply 1.2 million tonnes per annum liquefied natural gas (LNG) for 15 years.

Bharat PetroResources Ltd, the upstream arm of state-owned Bharat Petroleum Corp. Ltd (BPCL) and ONGC Videsh Ltd (OVL) hold 10% each. Other consortium members are Beas Rovuma Energy Mozambique Ltd (10%), PTTEP (8.5%) and Mitsui E&P Mozambique Area 1 Ltd (20%). Empresa Nacional de Hidrocarbonetos E.P (ENH), the national oil company of Mozambique, holds 15%.

An email sent to Anadarko on 24 February was not answered till press time.

“Capital expenditure for the basin has undergone revision. The drop in crude oil prices, the global LNG glut and competitive pricing have changed the rules of the game. Buyers now demand shorter contract terms and more flexibility,” said the second person cited above.

Capital expenditure for the project was initially pegged at $21 billion in 2015, and revised since crude oil prices began falling in the same year.

The project may have 60% debt and the rest as equity from partners.

As of year-end 2017, the company had approximately 1.44 billion barrels-equivalent of proved reserves, making it one of the world’s largest independent exploration and production companies.

This is Mozambique’s first onshore LNG development, consisting of two onshore LNG liquefaction trains (of 6 million MTPA each) with total nameplate capacity of 12.88 MTPA.

Source: Brinkwire

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