Mozambique approves Anadarko plan

13 February 2017, Week 06, Issue 726

The Mozambique government has approved the development plan for the Anadarko Petroleum-backed LNG plant on February 6. The news coincided with an update from the US company, which said it – and its partners on Area 1 – had signed up 5 million tpy of long-term offtake deals from the proposed plant. 

The US company, in a fourth quarter update last week, said it had also established the foundational legal and contractual framework, in addition to starting resettlement work and onshore site preparation. 

While Anadarko is making progress, it has been keeping project spending to a minimum, with only US$6 million spent on Mozambique in the quarter, down from US$10 million in the previous quarter. Spending in the US, meanwhile, was US$781 million for the period. Anadarko is the operator of Area 1 with a 26.5% working interest. 

shutterstock_420762049.jpg

The company expects to spend around US$150 million in Mozambique this year, principally to cover its share of costs associated with the site preparation. 

The company said that, based on its recent progress, its contract with the onshore contractor was in the process of being finalised, with offshore tenders also being issued. 

In the fourth quarter of 2017, Anadarko and its partners struck a heads of agreement (HoA) with Japan’s Tohoku Electric Power Co. As a result, offtake agreements now cover 5.1 million tpy of production, with another 3.4 million tpy under negotiations. 

During the third quarter of last year, Anadarko said the Area 1 team had reached a first agreement with Thailand’s PTT for 2.6 million tpy. This deal was subject to approval from the Thai government. 

A statement from Tokhoku Electric in mid-December said the contract was for a maximum of 280,000 tpy, with a contract length of 15 years. The contract is on a delivered ex-ship (DES) basis. Anadarko did not disclose the deals signed with other offtakers. 

The first phase of the plant will have two trains, giving a total capacity of 12 million tpy. The project backers require a certain level of committed offtake for financing. The LNG plant will take gas from the Golfinho/Atum field, which is located entirely within Area 1. 

ExxonMobil, which bought into Eni’s Area 4, will lead the construction for future LNG exports from this licence, which is adjacent to Area 1. 

Edited by

Ed Reed

Editor

Any questions? Please get in touch