Eni and Mozambique launched the Coral South floating liquefied natural gas project for developing the country’s deep-water gas field, as it signed drilling, construction and installation contracts for production facilities.
Coral South is the first project in the development of the considerable gas resources discovered by Eni in Area 4 of the Rovuma Basin. This achievement comes just three years since the drilling of the final exploration well in a country that is a newcomer to the global gas market.
The Floating Liquefied Natural Gas (FLNG) unit will have a capacity of around 3.4 MTPA (million tons per year) and will be the first FLNG in Africa and only the third globally, Eni said in a statement.
“As the world transitions to a low-carbon energy mix, Eni believes that the use of gas is critical to achieving a more sustainable future,” said Eni CEO Claudio Descalzi. “Our ambition to become a global integrated gas and LNG player is based on working alongside key partners such as Mozambique. The Coral South Project will deliver a reliable source of energy while contributing to Mozambique’s economic development. This partnership approach with our hosting countries is the foundation on which our joint sustainable growth strategy is built.”
Seperately, TechnipFMC-led consortium including JGC Corporation and Samsung Heavy Industries, were awarded the engineering, procurement, construction, installation, commissioning and start-up (EPCIC) contract of the Coral South FLNG facility and its associated risers and subsea flowlines system, as well as the installation of the umbilicals and subsea equipment.
Eni also signed with the Mozambican government for the regulatory framework and financing of the project.
The FLNG facilities construction will be financed through Project Finance covering around 60 per cent of its entire cost. This is the first project finance ever arranged in the world for a liquefaction floater. The financing agreement has been subscribed by 15 major international banks and guaranteed by 5 Export Credit Agencies.
The Coral field, discovered in May 2012, is located within Area 4 and contains approximately 450 billion cubic meters (16 TCF) of gas in place. In October 2016, Eni and its Area 4 partners signed an agreement with BP for the sale of the entire volumes of LNG produced by the Coral South project for a period of over twenty years.
Eni is the operator of Area 4, through its participation in Eni East Africa (EEA), which holds a 70 per cent participating interest in the concession while Portugal’s Galp Energia, South Korea’s Kogas and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), each hold 10 per cent stake.
Eni holds 71.4 per cent shares of Eni East Africa with China’s CNPC holding 28.6 per cent.
In March 2017 Eni signed an agreement to sell 50 per cent of its shares in EEA to ExxonMobil, which will be completed subject to satisfaction of a number of conditions precedent, including clearance from Mozambican and other regulatory authorities.
In the province of Cabo Delgado and in Maputo, Eni has engaged in a vast program of activities to the benefit of the population, including access to energy, access to water, health and sanitation, and education and training activities.