General Manager LNG Economics and Market Analysis
Anadarko Petroleum Corporation
11:55 - 12:20
Thursday, 19 September 2019
S1.8 Mozambique LNG - A Clean Source of Energy for the 21st Century
Anadarko-led Mozambique LNG is an emerging leader in the global LNG industry working to develop the first onshore LNG facility in Mozambique. Having discovered approximately 75 trillion cubic feet of recoverable natural gas in Offshore Area 1, Mozambique LNG represents an extraordinary opportunity to help meet increasing market demand for a sustainable, reliable and cleaner source of energy for decades to come.
In the long term, prospects for LNG demand growth are strong but there is no shortage of potential supply projects. While LNG demand is expected to be around 430 to 460 MTPA by 2025, the open demand for pre-FID supply projects is estimated to be 12 to 45 MTPA when taking into consideration projects already under construction, having recently taken FID. To meet this open demand, more than 100 MTPA of pre-FID supply is aggressively being marketed comprising North American LNG, Mozambique Areas 1 and 4, Qatar, Russia, Australia and other projects. This paper will address the successful steps taken by Mozambique LNG to be in a position to take FID in this complex landscape.
While Area 1 is competing with other suppliers for a slice of the market, Mozambique’s significant gas resource base; advantaged location and foundational legal and contractual framework implies that Mozambique LNG is considered a front runner among pre-FID projects as the project continues to gain momentum:
- In February 2018, Anadarko and its co-venturers announced they had entered into a long-term SPA with EDF for 1.2 MTPA for a term of 15 years.
- In March 2018, Anadarko and its co-venturers announced they had received official approval from the Government of Mozambique for the Golfinho/Atum Field Development Plan.
- In June 2018, Anadarko announced that Mozambique LNG will be in a position to take FID in the first half of 2019 and it had signed a Heads of Agreement with Tokyo Gas and Centrica LNG for the long-term supply of 2.6 MTPA of LNG.
- In October 2018, Anadarko announced the execution of its second SPA, this time with Tohoku Electric of Japan for 0.28 MTPA.
- In November 2018, Anadarko announced the selection of a consortium consisting of TechnipFMC and VanOord as the preferred tenderer for the engineering, procurement, construction and installation (EPCI) of the offshore subsea system for its Mozambique LNG project.
- In early February 2019, Anadarko announced the execution of three additional SPAs, this time with CNOOC for 1.5 MTPA, Shell for 2 MTPA and Tokyo Gas/Centrica co-purchasing for 2.6 MTPA.
- The project’s social impacts will primarily consist of resettling approximately 560 households, led by Anadarko’s Offshore Area 1 with Area 4 as a joint participant (Area 1 50% and Area 4 50%).
- Currently approximately 5,000 Mozambican workers are onsite working on a variety of Afungi Site Improvement projects which are de-risking the LNG Park in advance of FID.
The paper will finalize with an overview of the project’s portfolio SPA composition and future plans.