Mozambique Oil & Gas: Eni FID for Coral FLNG

Eni to announce Coral FLNG FID today

Eni is expected today, June 1, to announce that the final investment decision (FID) has been given to its Coral floating LNG project offshore Mozambique. It will be the first FLNG project in deepwater offshore East Africa ever to be sanctioned, but the FID has taken a good two years to finalise.

Three months ago ExxonMobil confirmed it would buy, from Eni, a 25% indirect stake in the natural gas-rich Area 4 block offshore Mozambique for $2.8bn.

Eni will retain a 25% indirect stake while China CNPC’s indirect stake will remain 20%. Three other firms, Mozambican state ENH, Portugal’s Galp, and South Korean state utility Kogas, each have 10% stakes in the Area 4. Eni will lead the FLNG development, while Exxon will handle later onshore liquefaction phases. Total project cost, including upstream investment to date, is estimated at some $8bn.

“Using a vessel liquefy gas offshore will allow the partners to realise cash flow from Mozambique earlier. The project will generate annual gross revenues of over US$1.5bn per year (before tax) for 25 years, utilising 4.7 trillion ft3 of gas over its lifetime. With FID out of the way, the project is now on track for first LNG production in 2022,” said consultancy WoodMac’s research manager for southern and east Africa, Alasdair Reid.

“This is really good news for the government of Mozambique. It demonstrates that, despite ongoing credit issues, there is still enough belief in the investment climate for partners to raise finance and move projects forward.”(source: Mark Smedley)


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