7 February 2018

Mozambique: Development Plan for Rovuma Basin Area One Approved

Maputo — The Mozambican government on Tuesday approved the development plan for Offshore Area One of the Rovuma Basin, off the coast of the northern province of Cabo Delgado, where a consortium headed by the US company Anadarko has discovered vast reserves of natural gas.

Approval of the plan paves the way for Anadarko and its partners to take their Final Investment Decision on the project.

Speaking to reporters at the end of the weekly meeting of the Council of Ministers (Cabinet), the government spokesperson, Deputy Minister of Culture and Tourism, Ana Comoana, said the plan covers the extraction of the gas in undersea wells, the transport of the gas to the onshore liquefaction plants, and all the storage equipment, with the capacity to handle almost six million tonnes of gas a year.

She added that the government estimates that, by the year 2047, the project will generate revenue for the state of 30.7 billion US dollars, from taxes and profit sharing.

In the drilling and construction phase, Comoana said, about 5,000 jobs will be created, although in the operational phase only 1,000 people will be employed.

The total investment required is estimated at 12 billion dollars, with disbursements starting this year.

Anadarko is the operator of Area One, and has a 26.5 per cent stake in the project. Its partners are the Japanese company Mitsui (20 per cent), PTT of Thailand (8.5 per cent), three Indian companies, ONGC Videsh (16 per cent), Bharat Petro Resources (10 per cent) and Oil India (four per cent), and Mozambique's own National Hydrocarbon Company, ENH (15 per cent).

Anadarko has already begun to negotiate offtake agreements for sale of the gas. In December it reached a Heads of Agreement with one of Japan's major buyers of liquefield natural gas, the Tohuku Electric Power Company, which has committed to buying 280,000 tonnes of LNG per year for a 15 year period.

It is not yet clear when construction of the onshore LNG plants in the Afungi Peninsula, in the Cabo Delgado district of Palma, will begin.

The Italian energy company ENI took its final investment decision for the Coral South gas field, in Area Four of the Rovuma Basin, in June 2017. This will involve construction of a floating LNG platform, expected to produce 3.3 million tonnes of gas a year. Export of gas from Coral South could start in 2022.

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