Wood Mackenzie comments on the recent news that US independent Anadarko Petroleum formally sanctioned its Mozambican LNG project, Mozambique LNG.
Anadarko is developing Mozambique’s first onshore LNG facility, initially consisting of two LNG trains with a total nameplate capacity of 12.88 million tpy. Feedgas comes from the Golfinho/Atum field, in Offshore Area 1.
Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa upstream team, said: “Mozambique LNG is one of two LNG mega-projects that have been seeking sanction for over four years in Mozambique.
“The other is the ExxonMobil-led Rovuma LNG development. With strong LNG demand growth out of Asia, now is Mozambique’s time.
“At US$20 billion, [this] FID is the largest sanction ever in sub-Saharan Africa oil and gas.”
He added: “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.”
Lawrence said that Wood Mackenzie expects the two Mozambique LNG projects to be the second and third most valuable oil and gas sanctions taken this year, after Arctic LNG-2 in Russia.
As first development mover, the Anadarko joint venture will lead construction of shared aspects of the two onshore LNG projects, he added.
In May this year, Anadarko chief executive Al Walker said the company would announce FID on 18 June 2019. He told reporters the decision came after it had secured both financing and off-take agreements for the project.
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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