Japan and Taiwan team up for Mozambique LNG purchases before Anadarko of US is taken over

Monday, 13 May 2019
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Anadarko Petroleum, the US company that has just agreed to be taken over by Occidental Petroleum and whose liquefied natural gas and African assets will be sold to French major Total in a side deal, has made additional LNG volume sales to Japan and Taiwan for the Mozambique LNG project.

Anadarko said the Mozambique LNG Company Ltd., the jointly owned sales entity of the Mozambique Area co-venturers, has signed a joint sale and purchase agreement with JERA Co. Inc, Japan’s biggest LNG buyer, and CPC Corp. of Taiwan.

The deal is for the sale of 1.6 million tonnes per annum for a base term of 17 years from the commercial start date and on a delivered ex-ship basis whereby the sellers, Anadarko’s successors and its partners, supply the shipping.

“This co-purchasing agreement with JERA and CPC brings together two prominent Asian foundation customers and will ensure a reliable supply of cleaner energy to meet the growing demands of both Japan and Taiwan,” said Mitch Ingram, Anadarko Executive Vice President for the international business.

“We are excited to take the next step with the expected announcement of a final investment decision (FID) for the Mozambique LNG project on June 18, as we remain on track to complete the project financing process and secure final approvals,” added Ingram.

“This new SPA brings our total long-term agreements to 11.1 MTPA, and we are extremely pleased and grateful to JERA and CPC for selecting Mozambique LNG to be part of their long-term energy portfolio,” state the Anadarko executive.

Anadarko has agreed to a takeover by Occidental after a bid valued at $55Bln when Anadarko’s debts are included, was chosen in preference to a rival bid from Chevron Corp.

Occidental has already offset $8.8Bln of its acquisition agreement for Anadarko by agreeing to sell Total its Mozambique LNG stake and its African oil and gas assets.

Anadarko is operator of the Mozambique project and has a 26.5 percent stake and operatorship of the Area 1 Rovuma Basin reserves that underpin the LNG venture.

Other shareholders in the Area 1 licence and LNG project include the Japanese trading house Mitsui and Co. and three Indian companies, Bharat Petro Resources, ONGC Videsh and Oil India Ltd., as well as Thailand’s national energy company PTTEP and the Mozambique state-owned oil and gas firm ENH.

The onshore Mozambique project will have phase one output of almost 12.9 MTPA.

Anadarko and its partners have signed up previous sales agreements for 9.5 MTPA of cargoes from the Mozambique project with Royal Dutch Shell, China National Offshore Oil Corp., Tokyo Gas, the UK’s Centrica, France's EDF and Indonesian energy company Pertamina.

Two other projects are planned in Mozambique from the Area 4 licence resources held by Italian energy company Eni and partners.

These include the Coral floating LNG joint venture with capacity of around 3.4 MTPA already under construction and scheduled to come on stream in 2022.

The Area 4 onshore Mamba LNG project is also expected to be sanctioned in 2019 and production is scheduled to start in 2024.

The Area 4 consortium is formed by Mozambique Rovuma Ventures, comprising Eni 25 percent, ExxonMobil 25 percent and China National Petroleum Corp. (PetroChina) with 20 percent.

The remaining 30 percent of shares in that licence are held in parcels of 10 percent by South Korean utility and energy company Korea Gas Corp., Galp Energia of Portugal and Mozambique’s ENH.


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