Anadarko-led Mozambique LNG

 

Anadarko-led Mozambique LNG is an emerging leader in the global LNG industry working to develop the first onshore state-of-the-art LNG facility in Mozambique. Anadarko and its co-venturers provided an update on the project at the LNG2019 conference in Shanghai in April 2019.

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This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Anadarko believes that its expectations are based on reasonable assumptions. No assurance, however, can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this presentation, including Anadarko’s ability to successfully plan, secure additional government and partner approvals, take FID and the timing thereof, finance, build, achieve expected cost savings, and operate the necessary infrastructure and LNG park in Mozambique. See “Risk Factors” in the company’s 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases. Anadarko undertakes no obligation to publicly update or revise any forward-looking statements.

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Green light

Development continues in the gas fields of the Rovuma Basin in Mozambique.

According to Max Tonela, Mozambican Minister of Mineral Resources and Energy, the agreement between operators in the Rovuma Area 4 and the Mozambican government is expected to be reached soon.   Tonela says that the development plan presented will be approved in the coming weeks and follows almost five months of discussions about the document.

According to several report the Final Investment Decision (FID) did not happen on schedule due to the failure of the first version of the block’s development plan, presented by the oil companies in July 2018, as it contained many gaps and violated a number of requirements.   One of the points of contention between the Mozambican government and the consortium led by the ExxonMobil and ENI groups is related to the limit on natural gas extraction in that block.

In the development plan presented to the government, the oil companies demand to extract between 21 billion and 22 billion cubic feet (ft³) of gas to feed the project, which is above the authorised limit of 12 billion ft³.

Tonela confirms the deadlock, but without specifying the consensus reached between the parties, he says that the important thing is to determine which portion of the gas to be extracted will feed the domestic market.

The project is operated by Mozambique Rovuma Venture, a partnership of shareholders that include ExxonMobil, ENI and the China National Oil and Gas Exploration and Development Corporation, which jointly hold a 70% interest in the Area 4 block concession.

With three stakes of 10% owned by South Korea’s Kogas, Portugal’s Galp Energia and Empresa Nacional de Hidrocarbonetos (ENH) of Mozambique.

Green-light for Rovuma

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2013

Subtech & Teras Cargo Transport toured the future site of Anadarko’s Afungi LNG plant in Palma Mozambique on 29 August 2013. This video documents the take-off from the existing Palma Airport(?), the flyover of the town of Palma and flypast of the coastline where the plant and MOF will be constructed

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Companies and their contracts signed

Companies sign contracts for oil exploration in Mozambique

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LNG projects such as Coral South FLNG have the potential to transform the economy and society of Mozambique. The reserves of the offshore Rovuma Basin, shared by Tanzania and Mozambique, could supply domestic demand for up to 5,000 years. With domestic reserves of up to 180 trillion cubic feet of gas, the development of such large-scale LNG projects has the potential to significantly boost the economy of one of the poorest countries in Africa.

The Empresa Nacional de Hidrocarbonetos (ENH) is the state-owned energy company responsible for commercialising gas reserves in Mozambique. ENH has at least a ten per cent stake in all LNG projects throughout Mozambique. Despite having to develop LNG infrastructure from scratch, the Mozambican Government expects to receive US$49.4 billion ($66.5 billion) in state revenue over the lifetime of various LNG projects, as a baseline scenario. With the first projects expected to start production in 2022, some analysts believe that Mozambique could eventually become the third-biggest LNG producer in the world, behind Qatar and Australia.

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February 2018

The airfield in the village of Mocímboa da Praia in northern Mozambique reopens non-scheduled international flights today to support the region’s natural gas investments, a government source said.   The two-kilometer track is just a few minutes’ journey by land or sea from the peninsula of Afungi, Palma, where in the next five to six years an industrial liquefied gas production area must be born to be exported on cargo ships worldwide.

The transportation of equipment is one of the objectives of today’s opening, which follows the authorization for use of the aerodrome for international flights assigned by the Mozambican government in December.   The license was granted after work to adapt the space to world safety standards.   That area of the province of Cabo Delgado is mainly dedicated to the primary sector with a large part of the population distributed by villages in the bush and without infrastructures.

The consortium for the exploration of natural gas is led by US oil company Anadarko that prompted the end of 2017 to start the process of resettlement of residents where the new industrial zone will be erected.  Mocímboa da Praia and its surroundings were the scene of clashes between groups of armed men and security forces between October and January, but without clarifying what was behind the violence.

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More information:

Mozambique is an African country and home to a population of 29 million people.  Its name came from its first known ruler, a Muslim Arab emir named Mussa ibn Bique. The Portuguese started referring to the region as the “Lands of Mussa ibn Bique” and from there the name was simplified to Mozambique.

Mozambique gas projects
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Anadarko-led Mozambique LNG is an emerging leader in the global LNG industry working to develop the first onshore state-of-the-art LNG facility in Mozambique.

Anadarko-led Mozambique LNG
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The media reported during May 2019 that the government of Mozambique has approved the development plan for the Rovuma LNG project, according to Mozambique Rovuma Venture.    This will produce, liquefy, and market natural gas from the deepwater Mamba fields in the Rovuma basin in the Area 4 block offshore Mozambique, two of which straddle the boundary with neighboring Area 1.

Mozambique Rovuma LNG development plan

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Given the increasingly crowded LNG market, Mozambique must minimise delays in developing its projects if it is to gain from the existing dynamics of the market.

Anadarko’s Palma Afungi LNG plant in Northern Mozambique