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Mozambique has closed a 25-year liquefied natural gas (LNG) supply deal with Italy’s energy firm Eni, to start in 2022.

According to a company statement, the $8 billion project, will supply all output to UK’s major oil company BP.

Eni sees opportunity

According to Eni chief executive Claudio Descalzi, the 3.4 million tonne per annum Coral FLNG plant will be the world’s first ultra-deep offshore FLNG project.

He added that it is also the first FLNG facility to be project financed, and will take five years from now to operation.

Financial interest

The Italian firm added that despite the associated technical and political risk, the project has secured financing from 15 banks – three national and 12 international.

The banks will lend $4.8 billion under the cover of guarantees from five export credit agencies including China EXIM, Korea EXIM, Italy’s SACE, and France’s Coface to finance construction of the FLNG facility.

Descalzi said: “This is the only large FID [financial investment decision] taken in the last year in the industry, worldwide. So we have to be proud of this achievement, first as a country and secondly as a joint venture.”

Currently going through a financial crisis, Alasdair Reid of global energy consultancy Wood Mackenzie, said: “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 forwards.” Read more…

Engineering News reported that the gas field holds about 450-billion cubic metres, or 16-trillion cubic feet (tcf) of gas, with estimated reserves of about 85 tcf, enough to supply Germany, Britain, France and Italy for nearly two decades.

 

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