BP and the Area 4 concession partners, Eni East Africa (EEA), Galp Energia (Galp), Kogas and Empresa Nactional de Hidrocarbonetos (ENH), have entered into a sales and purchase agreement for BP to purchase 100% of the liquefied natural gas (LNG) produced by the EEA-operated Coral South Floating LNG facility expected to be installed offshore Mozambique.
The agreement covers the purchase of LNG for over 20 years. The agreement, which has been approved by the government of Mozambique, is conditional on the Final Investment Decision (FID) being taken for the project, which is currently expected by the end of 2016. The Coral South Floating LNG facility is expected to have a capacity above 3.3 million tonnes per annum.
BP will use LNG from the contract to help meet its global supply commitments.
Paul Reed, chief executive of BP’s supply and trading business, said:
“BP is pleased to play a key role in enabling Mozambique to be an LNG exporting country. The agreement adds to the diversity of our natural gas portfolio beyond the end of the decade, further enhancing our ability to meet the needs of our customers.”(source: BP)
The final investment decision for the Coral FLNG project is expected to be reached by the end of the year, Eni said in its statement, noting that the deal has already been approved by the Government of Mozambique and is conditional on the final investment decision (FID) of the whole project which is expected within 2016.
BP, through its unit, BP Poseidon has booked the total capacity that will be produced from the Coral South Floating LNG facility, which will have a capacity above 3.3 million tons per annum of LNG.
Eni secured the approval from the Mozambique government for the development plan of the Coral FLNG project that is expected to produce around 3.4 mtpa, in January this year.
The approval relates to the first phase of development of 5 trillion cubic feet of gas in the Coral discovery, located in the Area 4 permit.
The giant discovery, located approximately 80 kilometers offshore of the Palma bay in the northern province of Cabo Delgado, is estimated to contain around 16 trillion cubic feet (TCF) of gas in place.
The plan of development, the very first one to be approved in the Rovuma Basin where 85 Tcf of gas have been discovered, foresees the drilling and completion of 6 subsea wells and the construction and installation of a floating LNG facility, Eni said after receiving the approval.
Eni is the operator of Area 4 with a 50 percent indirect interest, owned through Eni East Africa (EEA), which holds a 70 percent stake of Area 4.
The other partners are Galp Energia, Kogas and ENH with a 10 percent stake each. CNPC owns a 20 percent indirect interest in Area 4 through Eni East Africa.
LNG World News Staff