LNG

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.

Occidental Petroleum, the Texas-based company competing with Chevron Corp. to take over Anadarko Petroleum for around $55 billion including debt, has had its revised offer endorsed by the Anadarko board, including the sale of its Mozambique LNG stake and other African assets to French major Total if the deal is finalized.

“Anadarko’s board of directors, in consultation with its financial and legal advisors, has unanimously determined that the revised acquisition proposal it received from Occidental Petroleum on May 5 constitutes a ‘Superior Proposal’ as defined in Anadarko's previously announced merger agreement with Chevron Corp.,” said Anadarko.

The US takeover target added that Chevron has four business days ending on May 10 to increase its offer in accordance with the terms of the Chevron Merger Agreement signed on April 12.

“If Anadarko terminates the Chevron Merger Agreement in order to enter into a definitive agreement with Occidental, Anadarko will pay Chevron a $1 billion termination fee as required by the Agreement,” explained Anadarko.

Occidental’s latest offer amounts to 78 percent cash and 22 percent in Occidental shares, rather than the previous 50-50 split.

The bid is valued at around $38Bln versus $33Bln for the Chevron offer. In addition, the winning bidder would have to assume around $17Bln of Anadarko debts.

In connection with Occidental’s proposal to acquire Anadarko, Occidental has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to France's Total for $8.8Bln.

Anadarko, whose headquarters are near Houston, is being targeted because of the Mozambique LNG holdings and its strength in US shale production, especially in the Delaware Basin of Texas and New Mexico. Its other main US assets are in Colorado and the Gulf of Mexico.

Anadarko had said it was positioned to take a final investment decision on Mozambique LNG in the first half of this year.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains with nameplate capacity of 12.9 million tonnes per annum.

Feed-gas would come from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin. 

Analysts noted that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would fit with Anadarko’s development plans for Mozambique.

Occidental, a major North American chemicals manufacturer, has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining.

France’s Total is now hoping that the Occidental takeover bid for Anadarko is successful because of its deal with Occidental for Anadarko's Mozambique LNG stake and other African holdings.

“If completed, the acquisition offers us the opportunity to acquire a world-class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent,” said Total Chief Executive Patrick Pouyanne.

“We would be able to leverage our expertise in LNG by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner,” he explained.

Occidental Petroleum, the Texas-based company competing with Chevron Corp. to take over Anadarko Petroleum for around $55 billion including debt, has improved the structure of its offer and said it would sell Anadarko’s Mozambique LNG stake and other African assets to French major Total if its deal was accepted.

Occidental’s latest offer would amount to 78 percent cash and 22 percent in Occidental shares, rather than the previous 50-50 split.

Occidental is trying to persuade Anadarko shareholders to accept its offer rather than a merger agreement with Chevron, which is structured as a 75 percent stock and 25 percent cash deal.

“The revised offer creates immediate value for Anadarko shareholders and increases the chances of closing a deal,” said Occidental.

“In connection with Occidental’s proposal to acquire Anadarko, it has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to Total for $8.8Bln,” added the company.

“The sale is contingent upon Occidental entering into and completing its proposal to acquire Anadarko, and would be expected to close simultaneously or as soon as reasonably practicable afterwards,” stated Occidental.

Anadarko also issued a statement after the revised May 5 offer from Occidental when it referred to the still valid merger agreement with Chevron.

“In accordance with the terms of the Chevron Merger Agreement, and in consultation with its financial and legal advisors, Anadarko's board of directors will carefully review Occidental's Revised Proposal to determine the course of action that it believes is in the best interest of the company's stockholders,” said Anadarko.

Anadarko first announced on April 11 that it had received a takeover bid of $33Bln from Chevron, amounting to $50Bln if debt is included, and the signing of a formal merger agreement.

Anadarko, whose headquarters are near Houston, is being target because of its strength in US shale production, especially in the Delaware Basin of Texas and New Mexico. Its other main US assets are in Colorado and the Gulf of Mexico.

It also owns valuable assets in deep water oil and gas and LNG, including the onshore development in Mozambique.

Anadarko had said it was positioned to take a final investment decision on Mozambique LNG in the first half of this year.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains with nameplate capacity of 12.9 million tonnes per annum.

Feed-gas would come from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin. 

The Mozambique liquefaction plant is being built near the port of Pemba in the northeast Cabo Delgado Province.

Analysts said the revised terms and LNG accord with Total could now force Chevron to consider making an improved offer.

Analysts noted that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would fit with Anadarko’s development plans for Mozambique.

Occidental, a major North American chemicals manufacturer, has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining.

France’s Total is now hoping that the Occidental takeover bid for Anadarko is successful.

“If completed, the acquisition offers us the opportunity to acquire a world-class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent,” said Total Chief Executive Patrick Pouyanne.

“We would be able to leverage our expertise in LNG by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner,” he explained.

“We would also be able to generate value through adding volumes to our growing LNG portfolio where we are already the second-largest private player,” added the CEO.

In South Africa, the exploration licences from Anadarko are close to Total’s recent Brulpadda discovery.

Anadarko Petroleum Corp., the US energy company in the midst of a takeover duel between Chevron Corp. and Occidental Petroleum, reported a net loss in its first-quarter earnings, though this was offset by advances made in its Mozambique LNG export project.

The company, whose headquarters are near Houston, reported a net loss of $15 million with one-off charges of $274M amid total cash flow of $1.12 billion, lower than the 1.43Bln posted in the same quarter of 2018.

Anadarko's first-quarter 2019 sales of oil, natural gas and natural gas liquids totaled 64 million barrels of oil equivalent, or an average of 715,000 barrels per day and which included 412,000 barrels of oil.

Anadarko is the subject of the takeover bids because of its strength in US shale production, especially in the Delaware Basin of Texas and New Mexico. Its other main US assets are in Colorado and the Gulf of Mexico.

It also owns valuable assets in deep water oil and LNG, including Anadarko’s planned onshore development in Mozambique which is advancing, according to its latest earnings statement.

“The company continued to make significant progress with its Mozambique LNG project, announcing Sale and Purchase Agreements (SPAs) now totaling more than 9.5 million tonnes per annum (MTPA), with two additional SPAs in the final stages of execution that, if executed, would bring the total volume to more than 11 MTPA,” said Anadarko.

“During the quarter, the project also was designated as the first mover by the Government of Mozambique for the marine facilities to support the onshore LNG industry in Mozambique,” it added.

“The company remains positioned to take a final investment decision during the first half of this year,” stated Anadarko.

In the past week, Anadarko received a take-over offer of $38 billion from Occidental after accepting a $33Bln offer in mid-April from Chevron.

The competition to acquire Anadarko may force Chevron to consider whether it should make a higher offer.

Anadarko said its stockholders were advised to take no action at this time.

Analysts noted that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would fit with Anadarko’s development plans for Mozambique.

The $33Bln bid from Chevron and the $38Bln offer from Occidental would be valued at an additional $17Bln because of the scale of Anadarko’s debt commitments.

Anadarko had said on April 12 it had accepted Chevron’s bid after rejecting an initial approach from Occidental that fell short of a full bid.

Occidental, a major North American chemicals manufacturer, has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains.

The feed-gas will come from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin.

The Mozambique plant is being built near the port of Pemba in the northeast Cabo Delgado Province, about 900 kilometres north of Beira.

The Anadarko venture already has supply deals with European utilities Centrica of the UK and French utility EDF, the Japanese utilities Tokyo Gas and Tohoku Electric and energy companies, Royal Dutch Shell, China National Offshore Oil Corp. and Bharat Petroleum of India.

Mitsubishi Heavy Industries, the Japanese supplier of turbines and compressors for the liquefied natural gas industry, has signed an agreement to provide its equipment to the onshore Rovuma liquefaction plant joint venture in Mozambique in southeast Africa.

PetroChina, the Hong Kong-listed unit of China National Petroleum Corp. with widespread domestic assets and overseas stakes in oil and gas fields as well as Yamal LNG and an onshore liquefaction project in Mozambique, posted a jump in profits because of higher energy prices and soaring demand for natural gas.

Annual net profits at PetroChina amounted to RMB52.6 billion yuan ($7.86Bln) compared with 22.79 billion yuan ($3.39Bln) in 2017, a rise of 130.7 percent.

PetroChina posted a 16.8 percent rise in group revenues to 2.35 trillion Chinese yuan ($350.44 billion) in 2018 compared with 2.01 trillion yuan ($300.3Bln) in 2017.

In addition to holding its share in the Yamal joint Venture in Arctic Russia, PetroChina has a stake in the Area 4 reserves in the Rovuma Basin offshore Mozambique with Italian company Eni and ExxonMobil of the US that will underpin their Rovuma LNG project.

The plan submitted to the Mozambican government in Maputo gives details of the proposed design and construction of two processing Trains which will each produce 7.6 million tonnes per annum of LNG from the Mamba gas field.

“The Group seized the opportunity arising from the increase of international oil price in the first three quarters and the strong demand for natural gas,” stated PetroChina in its earnings statement.

PetroChina explained that the domestic output of natural gas steadily increased and imports of natural gas increased significantly, resulting in China surpassing Japan and becoming the largest importer of natural gas in the world for the first time.

“The overall supply and demand in the market was a bit tight. The country sped up the marketization of the natural gas prices, merged the city-gate prices of natural gas for residential and non-residential stations and further strengthened the regulation on pipeline transportation prices,” said PetroChina.

“The Shanghai Oil and Gas Exchange launched LNG terminal open-access transactions and the Chongqing Oil and Gas Exchange started international LNG transactions,” noted PetroChina.

China’s overall domestic output of natural gas amounted to 159.4 billion cubic metres in 2018, representing an increase of 7.2 percent compared with 2017.

PetroChina said natural gas imports were 124.2 billion cubic metres, representing an increase of 35 percent compared with 2017, while consumption of natural gas amounted to 280.3 Bcm, a rise of 18.1 percent versus 2017.

“The global economy recovered moderately, though various economies proved uneven in their respective development, resulting in increasing unstable and uncertain factors in international politics and economy,” added PetroChina.

“The economy of China remained generally stable with good momentum for growth,” it said.

China is also reliant on oil imports as its domestic output of crude oil in 2018 was just 189.28 million tons, representing a decrease of 1.1 percent compared with 2017.

“The group tried to improve the efficiency and profitability of its exploration activities and tried to reinforce the base of resources for keeping oil production stable and increasing gas output,” said PetroChina.

“In the Junggar Basin of Xinjiang, another significant discovery of exploration was made after that of the Ma Lake area,” it added.

“The oil and natural gas exploration in the Tarim Basin and Sichuan Basin successively made a new breakthrough. A group of reserves were also discovered and confirmed in the Erdos, Qaidam, Bohai Bay and Songliao Basins,” stated PetroChina.

“We pushed forward the development of unconventional oil and gas with steady steps and maintained momentum in growth of output of shale gas and coalbed methane,” explained PetroChina.

“In 2018, the domestic business achieved crude oil output of 733.7 million barrels, representing a decrease of 1.3 percent compared with 2017, and a marketable natural gas output of 3,324.7 billion cubic feet, representing an increase of 5.4 percent year-on-year,” it said.

In its overseas operations, PetroChina said total crude oil output amounted to 890.3 million barrels, representing an increase of 0.4 percent compared 2017.

“Overseas marketable natural gas output reached 3,607.6 billion cubic feet, representing an increase of 5.4 percent,” it added.

PetroChina said that at the end of 2018 it had global exploration rights for oil and natural gas amounting to 295.5 million acres.

“The number of net wells in the process of being drilled was 499 and the number of wells with multiple completions during the current reporting period was 9,792,” said PetroChina.

Qatar Petroleum said it signed an agreement with US major ExxonMobil, its main partner in the Qatari Ras Laffan LNG production complex, to acquire a 10 percent participating interest in three exploration blocks offshore the southeast African nation of Mozambique, one of the newest LNG developers.

Oct 15 (LNGJ) - Tohoku Electric, the Japanese utility with 7.6 million individual and corporate customers in six prefectures on Honshu Island, said it signed an agreement to receive cargoes from the onshore Mozambique LNG export project in southeast Africa being developed by US company Anadarko Petroleum with feed-gas from the Area 1 licence block of the Rovuma Basin. The deliveries will amount to 280,000 tonnes per annum for 15 years from the start of 2020s. The shipments will be on a delivered basis whereby the price includes the shipping costs. Anadarko has a 26.5 percent stake in Mozambique Area 1 and Japanese trading house Mitsui holds 20 percent. Three Indian companies, Bharat Petro Resources, ONGC Videsh and Oil India Ltd., hold a further 30 percent. The other stakeholders in Area 1 are the Thai energy company PTT Exploration and Production and the Mozambique state-owned oil and gas firm ENH.

US major ExxonMobil and Italian energy company Eni have submitted their development plan envisaging an initial two production Trains for the first phase of the onshore Mozambique LNG export project using feed-gas from the Rovuma Basin Area 4 offshore licence.