The U.S. energy firm Anadarko Petroleum Corp has announced its plans for the construction of a $20 billion gas liquefaction and export terminal in Mozambique, the largest single LNG project approved in Africa.
LNG prices slumped this year due to excess supply from new terminals in the United States, Australia and Russia as well as lower demand in Asia. Fall in prices prompted fears that investment decisions (FIDs) such as Anadarko’s may be dropped or delayed. However, the U.S. company ensured enough number of long-term buyers to underpin the financing of the project. These included flexible commercial arrangements, including an innovative co-purchase agreement with Tokyo Gas and Centrica. The project underscores the industry’s conviction that slump in prices this year is a short term phenomenon and that LNG demand will pick up sooner than later.There are also reports that Anadarko has agreed to be taken over by Occidental Petroleum Corp and Occidental in turn has agreed to sell assets including the Mozambique LNG project to French oil major Total SA.
The project is also expected to be a game changer for Mozambique, one of the poorest nations fighting economic crisis, with an annual gross domestic product of $13 billion. The project is expected to create more than 5,000 direct jobs and 45,000 indirect jobs for Mozambique. With a 12.88 million tonne per year (mtpa) capacity, it will be one of the largest greenfield LNG facilities. The project includes building infrastructure to extract gas from a field offshore northern Mozambique, pump it onshore and liquefy it, and export by LNG tankers to Asian and European markets. Anadarko partnered with Mitsui, Mozambique state energy company ENH, Thailand’s PTT and Indian energy firms ONGC, Bharat Petroleum Resources and Oil India in the Mozambique project.
