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Anadarko gives final go-ahead for $20 bln Mozambique LNG project

Jun 19, 2019
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Anadarko Petroleum Corp. gave the final go ahead for the US$20 billion LNG and export terminal in Mozambique, one of the most
valuable oil and gas sanctions this year.

In Mozambique's Offshore Area 1, the Anadarko-led Area 1 Mozambique LNG project can now advance to the construction phase, while the U.S. company looks to finalise financing soon.

Contractors selected for subsea works were also announced. These include Technip FMC, Oceaneering International, Advanced Technology and Cameron Italy. EPCI contracts for the offshore subsea system has been given to TechnipFMC and VanOord, the company said.

Additionally, a consortium of McDermott, Chiyoda and Saipem (CCS JV) were given the EPC contracts for the Mozambique LNG liquefaction facility and support facilities.

The Anadarko-led Area 1 Mozambique LNG project will be Mozambique's first onshore LNG development, initially consisting of two LNG trains with total nameplate capacity of 12.88 million tonnes per annum (MTPA) to support the development of the Golfinho/Atum fields located entirely within Offshore Area 1.

Anadarko Chairman and CEO, Al Walker said: "As the world increasingly seeks cleaner forms of energy, the Anadarko-led Area 1 Mozambique LNG project is ideally located to meet growing demand, particularly in expanding Asian and European markets.”

The project has successfully secured in aggregate 11.1 MTPA of long-term LNG sales (representing 86 per cent of the plant's nameplate capacity) with key LNG buyers in Asia and in Europe. Additionally, the project is expected to have a significant domestic gas component for in-country consumption to help fuel future economic development.

Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa upstream team, said: “At $20 billion, today’s FID is the largest sanction ever in sub-Saharan Africa oil and gas.”

“From the early 2030s, state revenue from Mozambique LNG alone will reach $3 billion per annum, single-handedly doubling today’s revenue, as calculated by the IMF and World Bank.”

Anadarko has agreed to be acquired by Occidental Petroleum Corp. Once finalised, Occidental has agreed to sell assets including the Mozambique LNG project to French oil major Total.

Frank Harris, Head of LNG Consulting, at Wood Mackenzie, said: “Flexible commercial arrangements, including an innovative co-purchase agreement with Tokyo Gas and Centrica, have been instrumental in securing the project a roster of high-quality customers in a crowded LNG market.”

Mozambique President Filipe Nyusi said the sanctioning of the Anadarko-led Area 1 Mozambique LNG project will create thousands of jobs for the nation and significantly boost economic growth.

Mozambique has “the potential to be one of the world's largest providers of cleaner energy for decades to come," he said.

The Anadarko-led Area 1 Mozambique LNG project has been designated as first mover by the government, meaning Area 1 will also be responsible for constructing the support facilities to be shared between Area 1 and Area 4 projects.

Anadarko Moçambique Área 1, Lda, a wholly owned subsidiary of Anadarko Petroleum Corporation, operates Offshore Area 1 with a 26.5 per cent working interest. Its partners in the Mozambique LNG project are Japanese company Mitsui, Mozambique’s state energy company ENH, Thailand’s PTT and India’s ONGC, Bharat Petroleum Resources and Oil India.