Anadarko Petroleum has signed sufficient non-binding deals on LNG exports from its proposed Mozambique development. It now needs to convert these into binding long-term sale and purchase agreements (SPAs), the company said last week. One official on the conference call compared the process to moving from an engagement to marriage.
The US-based company struck a binding SPA with Electricite de France for the supply of 1.2 million tpy in February. The deal would run for 15 years. In order to move ahead with the 12.88 million tpy facility, it requires binding commitments for 8.5 million tpy.
During the first quarter of the year, the company said it had made progress on resettlement and site preparation. Furthermore, it said evaluation was under way on selecting an offshore contractor and vendors. This is on track, it added, with Anadarko noting it was working to “optimise costs and implementation plans” ahead of a final investment decision (FID). The company expects to secure project financing for around two thirds of the total required capital. Once firm offtake contracts have been secured, contractors chosen and financing locked down, an FID can take place.
The Mozambique government approved the development plan for the Golfinho-Atum plan in March. The project will take supplies from Area 1 solely, rather than requiring a shared development with Eni, which operates the adjacent Area 4. In addition to liquefaction plans, Anadarko has said 2.83 mcm per day of gas will be directed to domestic use in Mozambique.
Anadarko has previously said the project could be scaled up to produce as much as 50 million tpy from Area 1.
Production in Algeria increased during the quarter, while Ghana slipped, as a result of maintenance on the Jubilee field.
Gross output in Algeria reached 326,000 boepd, with El Merk providing 150,000 boepd. In the previous quarter, gross production had reached 275,000 boepd, with El Merk slipping to 70,500 boepd as a result of statutory maintenance. First quarter volumes would have been higher but the HBNS facility was undergoing maintenance, which was completed after the quarter ended. Accordingly, output in the second quarter should rise.
Ghana’s gross production reached 133,000 bpd in the quarter, with Jubilee having slipped from 92,000 bpd in the previous period to 64,000 bpd. Anadarko said that turret bearing stabilisation work had been carried out, with production shut down for 19 days. Another shutdown is expected towards the end of the second quarter, with a further shutdown expected at the end of 2018.
Encouragingly, the Maersk Venturer drilled a first well to total depth on the TEN project, in Ghana, during the quarter. This is expected to contribute output in the third quarter. Development drilling will continue – on Jubilee and TEN – for the remainder of the year.