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Mozambique LNG secures long-term supply deal with Asian buyers

Highlights

To supply JERA, CPC Corp.

1.6 million mt/year over 17 years

London — Anadarko Petroleum has signed a joint 1.6 million mt/year LNG supply agreement with Japan's JERA and Taiwan's CPC Corp. for a 17-year period from the commissioning of its Mozambique LNG project, the US-based company said Monday.

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"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," Anadarko vice president Mitch Ingram said in a statement.

The 12.88 million mt/year Mozambique LNG terminal's portfolio of long-term sales now includes four of the top five LNG importing markets in the world, the statement said.

The top five LNG importing markets are Japan, China, South Korea, Taiwan and India, with South Korea missing from the SPA list.

Mozambique LNG long-term sales overview (million mt/year):

Companies Sales in million mt/year Period
Tokyo Gas & Centrica 2.6 Until the early 2040s
Shell 2 13 years
CNOOC 1.5 13 years
EDF 1.2 15 years
Tohoku 0.28 15 years
Bharat 1 15 years
Pertaminia 1 20 years
JERA & CPC Corporation 1.6 17 years
Total volume 11.18

A Heads of Agreement was also signed with Thailand's PTT Exploration & Production in June 2018, to sell 2.6 million mt/year, but the deal has not been converted into a binding agreement.

Anadarko said in April it was expecting one more SPA before announcing an expected FID for June 18.

Speaking at the Flame Conference in Amsterdam Monday, Anadarko vice president for marketing and shipping Andrew Seck said the financing process for reaching FID had not been affected by the takeover of Anadarko by Occidental and the associated deal to sell the assets to France's Total.

The company has been the subject of a bidding war between fellow US companies Chevron and Occidental Petroleum in recent weeks.

In early May Occidental said it had reached an $8.8 billion deal with French oil major Total to sell Anadarko's African assets -- including its stake in Mozambique LNG -- assuming Occidental completes the acquisition of Anadarko.

Anadarko last week said Occidental now has the "superior proposal."

Seck also said that Mozambique had the potential to be one of the world's top five LNG producers alongside Qatar, Australia, the US and Russia.

Mozambique is well positioned to become a key LNG exporter, with growing global LNG demand expected to outpace supply from 2022.

The feedgas for the liquefaction terminal will come from the Golfinho/Atum field located in the Offshore Area 1, with reserves estimated at 2125 Bcm, according Mozambique LNG. Partners in Offshore Area 1 include Anadarko (26.5%), Mitsui (20%), Empresa Nacional de Hidrocarbonetos (15%), ONGC Videsh (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%) and PTT Exploration & Production (8.5%).

The other two LNG projects in Mozambique are: the Eni-led 3.4 million mt/year Coral South FLNG, sanctioned in June 2017 for commissioning in 2022, and the 15.2 million mt/year Rovuma LNG led by a Eni- Exxon Mobil JV with a FID expected by end of 2019 and launch in 2024.

-- Lucie Roux, lucie.roux@spglobal.com

-- Stuart Elliott, stuart.elliott@spglobal.com

-- Edited by Jonathan Fox, jonathan.fox@spglobal.com