Story by Bloomberg
Anadarko Petroleum Corp. may soon close sales accords enabling it to this year authorize a Mozambican project that has the potential to make the nation a top-three liquefied natural gas exporter, a company official said.
Anadarko may close the supply deals “in the coming months,” John Peffer, Mozambique country manager for the Woodlands, Texas-based company, said at a conference Wednesday in Maputo, the capital. If government approvals are won in time, a final investment decision can be made and “production in 2019 is doable,” he said.
Anadarko and its partners in the project off the southern African nation’s north coast estimate there is 75 trillion cubic feet of gas to exploit, enough to make the country the biggest LNG supplier after Qatar and Australia in the next decade. While Mozambique has kept a deadline of 2018 for its first exports, Rome-based Eni SpA, which also has rights to a gas field off the country’s coast, has said that goal would be challenging as building an LNG plant can as long as six years.
Anadarko’s Area 1 and Eni’s Area 4 in the Rovuma Basin off Mozambique’s north coast together hold technically recoverable reserves of 120 trillion cubic feet, according to industry consultant Wood Mackenzie. LNG is gas chilled to liquid to allow its transportation to customers by ship.
A final investment decision depends on converting non-binding “heads of agreement” that the Anadarko-led project has in place for 8 million metric tons a year of gas with customers in Japan, China, Thailand and Singapore into a sales contract, a presentation Peffer gave Wednesday showed.
Anadarko and the government also need to reach agreement on details of a law drafted to cover the gas projects and passed by the country at the end of last year, Peffer said. Mozambique’s passage of the law was “a huge milestone for the project” and has elicited “positive reactions from both the buyer and the lender community,” Peffer said.