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Mozambique: state oil company signs 20-year purchase agreement

On Tuesday, Mozambique’s national oil company ENH announced that it has entered into a 20-year sales agreement with BP for the procurement of liquefied natural gas (LNG) from the South Coral Field, engineering News reported.

The agreement was signed together with Block partners Area 4 in Mozambique, including ENL, ENI, operator of Area 4, Galp and Kogas, the state-owned company said in a statement.

According to ENH, the LNG will be delivered and produced in a floating LNG plant installed in South Coral field in the Rovuma Basin.

Mozambique to import LNG

According to the oil firm, the FLNG plant will have the capacity to produce above 3.3 million metric tonnes of LNG per year.

“The agreement has been approved by the Government of Mozambique and is a condition for Decision Final Investment (FID) of the project, which is expected to still happen in 2016,” ENH said.

The company added: “Through this agreement, the partners Area 4 have achieved another important milestone for the implementation of development project of Coral South, following the adoption in February 2016, the Project Development Plan.

“Eni is the operator of Area 4 with a 50% indirect investment held by Eni East Africa (EEA), which in turn owns 70% of Area 4.”

The other utilities are the National Hydrocarbon Company (ENH), with 10% stake, Galp Energia (10%), the KOGAS (10%). CNPC holds a 20% indirect investment in Area 4 by Eni East Africa.

Gas developments

In March this year, SacOil Holdings announced that it had signed a cooperation agreement with various firms for the construction of a $6 billion natural gas pipeline in Mozambique.

The consortium included the Empresa Nacional de Hidrocarbonetos E.P (ENH), Profin Consulting Sociedade Anónima (Profin) as well as the China Petroleum Pipeline Bureau.

The agreement will enable the development of a natural gas pipeline from Northern Mozambique to Gauteng, South Africa to commence.

SacOil’s CEO Dr Thabo Kgogo defined the signing of the agreement as paving the way for speedy and effective construction and implementation of the natural gas project.

“It [the agreement] confirms the financing commitments required for the pre-investment and engineering studies phases of the project, and paves the way for its speedy and effective construction and implementation.

“The agreement brings together a wealth of expertise as a pre-investment consortium that will focus on bringing the project to bankability, assuring that a solid investor group is drawn from China, Mozambique and South Africa.”

Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.