The information company Energy Intelligence has reported that the Coral South Floating Liquefied Natural Gas (LNG) terminal has run into technical issues that could delay shipment of the first cargo of LNG from Mozambique.
The LNG will be produced by a consortium led by the Italian energy company, ENI. The LNG facility, built in a Korean shipyard, arrived in Mozambican waters in January and should by now be anchored in Area Four of the Rovuma Basin, some 40 kilometres off the coast of Cabo Delgado province. This will be the first deep-water platform in the world to operate at a water depth of about two thousand meters.
Last week, AIM reported that the tanker “British Mentor” was on its way to Coral Sul to pick up LNG for the British company BP. However, according to the ship-tracking website Marine Traffic, “British Mentor”, after hanging around in the Mozambique Channel for a couple of days, has changed its destination to Oman and is heading north to the port in Arabia.
According to Energy Intelligence, a source informed them that “serious issues [were] reported at Coral FLNG with one critical distillation column (demethaniser) suspected of having internal damage. Shutdown is required for inspection and repair, which will delay the start-up schedule by several days, if not weeks”.
Once fully operational, the terminal will produce 3.4 million tonnes of LNG per year. All of its output over the next 20 years has been bought by BP. However, a spokesperson for BP, contacted by AIM, was not able to comment on the movements of “British Mentor”.
The Coral Sul project will be the first of three projects to produce LNG in Mozambique. The main participant in Area Four is Mozambique Rovuma Ventures, a partnership between ENI, the US oil and gas giant ExxonMobil and the China National Petroleum Corporation (CNPC), which together control 70 per cent of the undertaking. The remaining 30 per cent is divided equally between the Mozambican state hydrocarbon enterprise ENH, Galp Energia of Portugal, and Kogas of South Korea.
The other LNG venture currently underway is the Mozambique LNG Project using gas from Rovuma Basin Offshore Area One. The French oil and gas company, TotalEnergies, is the operator with its partners coming from Japan, India, Thailand, and Mozambique. When operational, the project will produce 12.88 million tonnes of LNG per year for domestic consumption and export.
Progress with this project has been held up following the decision of TotalEnergies in April 2021 to declare force majeure following an attack by islamist terrorists near the Afungi Peninsula where the onshore LNG facility will be constructed.
Also read: PPF invests US$34M in Mozambique Zinave Park
However, according to one of the project’s partners, BPCL of India, which holds a ten per cent stake in Area One, the project should resume in the first half of 2023. The Chair and Managing Director of the company, Arun Kumar Singh, told shareholders at its Annual General Meeting that “now, with the efforts of the Government of Mozambique’s forces, supported by a regional coalition, progress is being made in improving the security situation in the region, and the project will resume once the security situation is stabilised in a sustainable manner”.
A third development, the Rovuma LNG Project, will use gas from offshore Area Four to produce 15 million tonnes of LNG a year. However, the operator, ExxonMobil, has not yet taken its final investment decision.