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Anadarko expects to sign Mozambique gas supply agreements this year
September 10, 2013 / 8:06 AM / 4 years ago

Anadarko expects to sign Mozambique gas supply agreements this year

TOKYO, Sept 10 (Reuters) - Anadarko is talking to buyers about supplies of gas from its planned project off the coast of Mozambique, where some of the world’s biggest reserves lie untapped amid rising demand in Asia for the liquefied form of the fuel.

Mozambique is emerging as a key prospect for the export of liquefied natural gas (LNG) because of the size of discoveries there, its location en route to Asia, and its appeal to buyers trying to diversify away from big suppliers Qatar and Australia.

“We believe we will be announcing heads of agreements through the course of this year and next,” Anadarko CEO Al Walker told an LNG conference in Tokyo on Tuesday, referring to initial supply contracts.

The company is on target to ship the first cargo from Mozambique in 2018 and has completed 90 percent of offshore feed work and 60 percent of onshore work, Walker said.

By the end of the year Anadarko will have invested $3 billion in its discoveries off the coast of Mozambique, which have between 35 and 65 trillion cubic feet of estimated recoverable reserves in a block known as Area 1, he said.

Anadarko is speaking to about 20 buyers, said a source close to the negotiations. The company has been in talks with buyers “all morning,” Walker told Reuters after his comments to the conference. He declined to be more specific.

The company plans to start with four liquefaction plants, known as trains, Walker said. The company envisages building as many as 10 trains, he said, adding the company has 7,000 hectares of land set aside.

Anadarko has teamed up with Eni and the two are planning joint development of their respective fields. On its website, Anadarko says it is planning an eventual capacity of 50 million tonnes a year of LNG from Mozambique. (www.anadarko.com)

About 150 trillion cubic feet (tcf) of gas has been found off the east African country’s shores, enough to supply Germany, Britain, France and Italy for 15 years, and the government and companies scouting wells have estimated there may be potential to double that estimate.

Japanese trading house Mitsui & Co is also a partner in Anadarko’s Mozambique project and Japanese buyers including power and gas utilities have expressed interest in buying gas from east Asia to diversify their sources.

All but one of Japan’s nuclear power plants are shut down in the wake of the Fukushima nuclear disaster two-and-a-half years ago, leading to a surge in demand for LNG in the country.

Underlining the potential of Mozambique’s Rovuma basis, Eni said last week it had made a new gas discovery at its giant Mozambique field, opening up new acreage at what is the Italian oil and gas group’s biggest ever gas discovery.

State-controlled Eni owns a majority stake of Area 4 in Mozambique’s Rovuma basin, one of the planet’s biggest untapped gas resources.

In April Eni said gas discoveries at its Mozambique fields contained around 80 trillion cubic feet.

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