Mozambique seeks LNG FID this year: Anadarko

OREANDA-NEWS. June 09, 2015. The government of Mozambique would like developers to reach a final investment decision (FID) on the planned 12mn t/yr onshore liquefaction facility by the end of 2015, project developer Anadarko said at the World Gas Conference in Paris on 3 June.

Anadarko's LNG marketing director Steve Hoyle was unable to comment on when it expects to reach an FID on the planned project. The Mozambique government also could not be reached for comment.

If an FID were reached this year, the project could produce first LNG in 2019.

By contrast, Italy's Eni said that it plans to reach FID on the onshore facility in Mozambique in 2016-17, with first LNG exports in 2022. In April Eni said that it is planning to reach FID on its 2.5mn t/yr floating LNG (FLNG) facility by the end of this year.

A draft plan for the development of the project has been submitted to the government and a consortium consisting of engineering firms CBI, Chiyoda and Saipen have been selected for the initial development of the LNG park in Mozambique.

The government issued a project decree law last year which enables 30 years of fiscal stability, Hoyle said. We are working with the government to implement the decree law, and the government is making its intention for us to proceed to FID pretty clear, he said.

Developers have reached initial agreements for over 8mn t/yr with credit-worthy buyers. Buyers are likely to include experienced energy utilities in Japan, China, Thailand, Indonesia and Singapore. These agreements are progressing towards sales and purchase agreements. Some volumes will be left for spot cargoes and mid-term contracts, Hoyle said.

Anadarko will be the main marketer of volumes with Japanese trading firm Mitsui supporting marketing activities.

Low oil prices are an opportunity for buyers to secure LNG volumes at lower prices, he said. Buyers that "go against the herd and commit" to buying LNG will benefit from lower-priced LNG.

The project will require about 16 LNG carriers. The shipping acquisition is not urgent as Anadarko expects about three years between vessel order and delivery. Mozambique will be offered equity in the vessels, Hoyle said.

Anadarko is the lead shareholder in the Mozambique LNG consortium with a 26.5pc share. Other shareholders are Mitsui (20pc), Mozambique's ENH (15pc), India's ONGC (16pc), India's Bharat Petroleum (10pc), Thailand's PTTEP (8.5pc), Oil India Limited (4pc).