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Mozambique Gas: Anadarko working on SPAs for Area 1

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Anadarko Petroleum has agreed key terms on the offtake of around two-thirds of the liquefied natural gas from the first phase of its proposed Area 1 development in Mozambique, where sanction is set for the first half of next year.

The US independent is currently working on converting heads of agreement on volumes at the Golfinho-Atum (Dolphin-Tuna) scheme into firm sale and purchase agreements (SPA).

The initial development of the development will involve two LNG trains of 6.44 million tonnes per annum capacity each connected to the producing fields via a 40 kilometre pipeline.

Production will come from 20 subsea wells, with some of the wells set to produce 2 billion cubic feet per day of gas.

Construction of housing has already begun, but another main focus currently for Anadarko is firming up SPAs, Gonzalo Cabrera, general manager LNG economics and market analysis at the US company, said at Gastech in Barcelona.

Anadarko already has already announced deals for 6.7 MMtpa, with the first one clinched being with French utility EdF for 1.2 MMtpa.

“We have more than 8.5 MMtpa on key terms agreed already with some of our customers,” Cabrera said.

“When I say ‘key terms’, we are talking about price and volume. That’s why we feel confident that FID can be taken – we have everything we need.”

Cabrera reiterated Anadarko’s recent stance that a final investment decision is seen in the first half of 2019.

Cabrera said Anadarko has taken down the project capital investment for the onshore and offshore scopes by $4 billion since 2016, while it is targeting a cost of production of less than $600 per tonne of LNG.

Finalising project financing is one of the final steps before sanction, as well as getting governmental approvals and being granted site access.

Anadarko holds a 26.5% stake in Area 1 and is partnered by Japan’s Mitsui on 20%, Mozambique state-owned ENH with a 15% carried interest and PTTEP of Thailand on 8.5%.

The remaining partners are all Indian and comprise Bharat Petroleum, ONGC Videsh and Oil India Limited, each with 10% stakes.

Source: The Post

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