MOZAMBIQUE LNG has signed two separate long-term supply agreements with Shell and Centrica-Tokyo Gas, boosting the project’s chances of a positive Final Investment Decision (FID), expected in the first half of 2019.
British-Dutch giant Shell agreed to buy 2 million mt/year of LNG for a term of 13 years, Mozambique LNG’s owner Anadarko Petroleum said. Earlier, the UK’s Centrica and Japan’s Tokyo Gas jointly agreed to buy 2.6 million mt/year from the project from start-up until 2040, according to an announcement from Centrica.
Last Friday, Anadarko also agreed to sell 1.5 million mt/year from Mozambique LNG to China’s CNOOC for a period of 13 years, S&P Global Platts reported.
Following the agreement with Shell, long-term sales from the 12.9 million mt/year project total more than 7.5 million mt/year, Anadarko Vice President Mitch Ingram said.
‘The Shell deal adds to our growing list of high-quality customers demonstrating the excellent progress we are making toward our stated goal of taking a final investment decision during the first half of this year,’ he said.
‘With demand for LNG expected to grow worldwide in the middle of the next decade, Shell’s strong global reputation in LNG, combined with Mozambique LNG’s significant resource and favorable geographic location, create a unique opportunity to provide customers with a long-term, reliable supply of clean energy.’
Other additional deals are expected in the near future, he said.
The Centrica-Tokyo Gas deal follows a non-binding deal signed in June 2018 and LNG will be delivered ex-ship (DES) to either Europe or Asia.
Companies want to take advantage of the southeast African country’s central location between Europe and Asia, whose gas markets have different supply and demand fundamentals.
The agreement also represents the first long-term LNG procurement contract in Africa for both Tokyo Gas and Centrica, which is in line with their plan to diversify their respective supply portfolios.
The deal will improve liquidity and further develop the global LNG market, Centrica said.
The Mozambique LNG plant is expected to support the development of the Golfinho/Atum field located entirely within Offshore Area 1.
Partners in the Offshore Area 1 include Anadarko (26.5 percent), Mitsui (20 percent), Empresa Nacional de Hidrocarbonetos (15 percent),ONGC Videsh (10 percent), Beas Rovuma Energy Mozambique Limited ( 10 percent), BPRL Ventures Mozambique B.V. (10 percent) and PTT Exploration & Production (8.5 percent).