Mozambique Oil & Gas: Anadarko in talks with 9 Indian firms to sell gas from Rovuma Area 1 block

Rovuma basin Anadarko vesselMumbai, February 26 – Anadarko Petroleum Corp is in talks with nine Indian companies to sell gas from Mozambique’s Rovuma basin, two people aware of the development said.

The US-based company, holding 26,5% stake in Rovuma, is the operator of the block. Gas from the basin is expected to flow form 2022-23, against an earlier estimated of 2019.

“We are in the last leg of gas marketing and the final investment decision will be taken when the final marketing arrangements are wrapped up. We are in talks with a number of companies in India. We think India will be a big market for LNG in the future,” the first of two sources cited said on condition of anonymity.

The consortium is in talks with Petronet LNG, Oil and Natural Gas Corp., Hindustan Petroleum Corp., Bharat Petroleum Corp. Ltd and Gurajat State Petroleum Corp. among others, the second of the two source cited above said, also on anonymity condition.

On 20 February, Anadarko signed a deal with Electricite de France, SA
(EDF) of France to supply 1.2 million tonnes per annum liquid natural gas (LNG) for 15 years.

Bharat PetroResources Ltd, the upstream arm of state-owned Bharat Petroleum Corp. Ltd (BPCL) and ONGC Videsh Ltd (OVL) hold 10% each. Other consortium members are PTTEP (8,5%) and Mitsui E&P Mozambique Area 1 Ltd (20%), Empresa Nacional de Hidrocarbonetos E.P (ENH), the national oil company of Mozambique, holds 15%.

An email sent to Anadarko on 24 February was not answered until press time.

“Capital expenditure for the basin has undergone revision. The drop in crude prices, the global LNG glut and competitive pricing have changed the rules of the game. Buyers now demand shorter contract terms and more flexibility,” said the second source.

Capital expenditure for the project was initially pegged at $21 billion in 2015 and revised since crude oil prices began falling in the same year.

The project may have 60% debt and the rest as equity from partners.

As of year-end 2017, the company had approximately 1.44 billion barrels-equivalent of proved reserves, making it one of the world’s largest independent exploration and production companies.

This is Mozambique’s first onshore LNG development, consisting of two onshore LNG liquefaction trains (of 6 million MTPA each) with total capacity of 12.88 MTPA

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