State-owned China National Offshore Oil Corp (CNOOC) is among the companies that have signed deals to import liquefied natural gas (LNG) from Mozambique, Reuters news agency reports. The agreements that have been signed so far – yet to be officially announced – offer flexible contract terms on 20-year deals, according to the media outlet.
Preliminary deals have also been reached with Japan, Indonesia’s state-run PT Pertamina, the United Arab Emirates, Thailand’s PTT Pcl, and companies in India, a company and industry sources close to the talks told Reuters.
U.S. oil major Anadarko Petroleum Corp is building the first two plants of up to 10 it plans in Mozambique to liquefy gas for export. Gas discovered in Area 1 of the country’s Rovuma Basin will feed the initial 10-million tonne per annum, US$23-billion export project, which is due to start by 2021.
Signing the deals is critical to secure bank financing for Anadarko and its Area 1 project partners to build the project, Reuters said.
Standard Bank expects the LNG deals to swell the state purse of Mozambique. It sees Anadarko’s initial project adding US$67 billion to government revenue over its 30-year life, rising to US$212 billion once the two initial plants are expanded to six.
According to Reuters, the supply deals have mostly been set via heads of agreement accords covering two-thirds of the gas from Anadarko’s flagship development. Negotiators are now trying to convert those into binding agreements by year-end.
Last year, China National Petroleum Corp (CNPC) paid US$4.2 billion for a 20 percent stake in the Area 4 LNG export venture in Mozambique of Eni SpA – an Italian multinational oil and gas company.
CNOOC is set to lift 2 million to 2.5 million tonnes a year from Anadarko’s site in Area 1, three sources were quoted as saying.
“The terms of the CNOOC deal were ironed out some time ago, and it has just been parked waiting for the project to take a final investment decision,” an Area 1 project source told Reuters.