Anadarko to Proceed with $20 Billion Mozambique LNG Project

(P&GJ) – Anadarko Petroleum Corp has formally sanctioned the construction of a $20 billion gas liquefaction and export terminal in Mozambique, energy consultant Wood Mackenzie said Tuesday.  It is the largest single LNG project ever sanctioned in Africa. 

(source: Anadarko/Mozambique LNG)

Mozambique’s first onshore LNG facility initially will consist of two LNG trains with a total nameplate capacity of 12.88 million tons per annum (mmtpa), with feedgas delivered via newly constructed pipeline from the Golfinho/Atum field, in Offshore Area 1.

“Mozambique LNG is one of two LNG mega-projects that have been seeking sanction for over four years in Mozambique," said Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa team. 

The other is the ExxonMobil-led Rovuma LNG development.

"With strong LNG demand growth out of Asia, now is Mozambique’s time," Lawrence said.  “We believe that, from the early 2030s, state revenue from Mozambique LNG alone will reach US$3 billion per annum, single-handedly doubling today’s revenue, as calculated by the IMF and World Bank.”

The FID confirmation from Wood MacKenzie followed an announcement last month by Anadarko that an announcement was expected to be made today.

“We expect June 18 will become a historic day in Mozambique as we announce that one of the most important and transformational projects in our country’s history is ready to advance to the next stage,” Mozambique's President Filipe Nyusi said in the May 8 announcement from Anadarko, following a meeting with Anadarko chairman and CEO Al Walker. “We recognize Anadarko’s continued commitment to moving this project forward to becoming a reality.”

“With commitments for financing in place, off-take secured, and all other issues under negotiation successfully addressed, we are excited to take the next step with the expected announcement,” Walker added.

“Mozambique LNG is among the most significant projects that our company or any other has undertaken, given the scale of the project, size of the resource, and the potential long-term transformational benefits it represents for Mozambique," Walker said.  "We are grateful for the continued support of the people and government of Mozambique, our co-venturers, and the thousands of men and women working in the Cabo Delgado region to develop this exciting project. We look forward to celebrating the official sanctioning of Mozambique LNG on June 18.”

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.”

Anadarko is set to be taken over by fellow US independent Occidental Petroleum. Occidental recently agreed to sell Anadarko’s sub-Saharan Africa upstream assets – including the company’s Mozambican holdings – to French major Total in a US$8.8 billion deal.  The transaction, which is contingent upon Occidental completing its acquisition of Anadarko, is expected to close in 2020.

Anadarko’s 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. 

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