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Anadarko signs agreement with Japanese, UK companies for Mozambique LNG plant

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Anadarko signs agreement with Japanese, UK companies for Mozambique LNG plant

Anadarko Petroleum Corp. signed a long-term purchasing agreement with Japanese gas utility Tokyo Gas Co. Ltd. and a U.K.-based Centrica PLC unit for its LNG project in northern Mozambique.

Tokyo Gas and Centrica Lng Company Ltd. will take 2.6 million tonnes per annum from the beginning of production at the Anadarko-run LNG plant until the early 2040s, according to a June 15 news release.

"This [heads of agreement] brings together the Anadarko-led Mozambique LNG project and two additional prestigious customers, and it is closely aligned with the Japanese government's desire for a competitively priced and flexible long-term supply of LNG to enhance the nation's energy security," Anadarko Executive Vice President Mitch Ingram said in the statement.

"This off-take arrangement takes full advantage of Mozambique's favorable central location, which enables Mozambique LNG to supply customers in both the European and Asian-Pacific markets," he said.

The Mozambique government approved the $20 billion LNG project in early February and in July finalized agreements with the government for the construction and operation of the plant's marine facilities. The project's Area 1 onshore LNG plant, which will support the Golfinho/Atum fields, would have two initial LNG trains with a total capacity of 12.88 million tonnes per annum.

Giles Farrer, research director for global LNG at Wood Mackenzie, said the deal gives the LNG project momentum. The agreement "is an important milestone for the [project] and another sign that optimism is returning to global LNG markets ...," he said. "It could also encourage other buyers to finalize offtake from the project."

"Market intelligence indicates that other deals are close with Asian buyers, which could encourage those countries' national export credit agencies to provide funds for the project," Farrer said.