What is Mozambique Area 1 LNG Project – Your Ultimate Guide

what is mozambique area 1 lng project

Mozambique is emerging as a major LNG producer. This is true since the first discovery of a vast quantity of natural gas off the coast of northern Mozambique in 2010. However, you might be wondering, what is Mozambique Area 1 LNG Project?

To date, about 65 TCF of recoverable natural gas has been discovered in the Offshore Area 1. This is an equivalent of a 12 billion barrel oil field. The results of the drill stem testing (DST) program in the Prosperidade and Golfinho – Atum areas demonstrate the flow characteristics of the reservoirs.

What is Mozambique Area 1 LNG Project?

Mozambique Area 1 LNG project is an LNG project in the country of Mozambique that comprises the Golfinho-Atum gas field development in the offshore Area 1 block of the deep-water Rovuma Basin. In addition, it comprises of the construction of a 12.88 million tonnes per annum (Mtpa) onshore liquefied natural gas (LNG) facility on the Cabo Delgado coast of Mozambique.

Anadarko Petroleum Corporation, through its then wholly-owned subsidiary Anadarko Moçambique Área 1, held majority stake in the Mozambique Rovuma Offshore Area 1 development consortium.

The final investment decision (FID) on the Area 1 Mozambique LNG project was taken in June 2019. It is estimated to cost about $20bn.

Construction works on the integrated LNG project started in 2019, with the start of production scheduled for 2024.

The Mozambique Area-1 LNG project is the first onshore LNG facility in Mozambique.

Mozambique Area-1 LNG Project History

In 2011 and 2012, gas and oil multinationals ENI from Italy and Anadarko from the U.S.A. made a huge discovery: a gas field containing 7000 billion cubic meters of gas, just off the coast of Cabo Delgado, Mozambique’s northernmost province.

This has become the world’s fourth largest offshore gas project. The discovery is worth hundreds of billions of dollars.

Mozambique is emerging as a future leader in the global LNG industry, and this is as it works to develop an LNG facility on the Afungi peninsula in Cabo Delgado province.

With approximately 75 trillion cubic feet of recoverable natural gas discovered in the Area 1, the Mozambique LNG Project represents an extraordinary opportunity to meet increasing world demand for a energy.

To start, environmental impact assessment (EIA) for the Mozambique Area-1 LNG project was carried out between 2011 and 2014.

Thereafter, the Mozambican Ministry of Coordination of Environmental Affairs (MICOA) approved the EIA report in June 2014.

Finally, the concessions to design, build and operate the marine facilities for the project were secured from the Government of Mozambique in July 2017.

Most importantly, the Government of Mozambique gave the final approval for the Mozambique Area-1 LNG development plan in March 2018.

Mozambique Area-1 LNG Project Details

The Golfinho-Atum gas field is located in 1,600m-deep waters within the Rovuma Basin Area 1, approximately 40km off the coast of Cabo Delgado. The Offshore Area-1 is estimated to contain 75 trillion cubic feet (tcf) of recoverable natural gas resources.

The LNG processing and export facility will be developed in the Afungi peninsula in Cabo Delgado, the northernmost province of Mozambique.

Mozambique Area-1 LNG Project Operator and Partners

Anadarko holds 26.5% interest in the Rovuma Area 1 exploration and production concession. The other licensees are ENH Rovuma Área Um (15%), Mitsui E&P Mozambique Area1 (20%), ONGC Videsh (10%), Beas Rovuma Energy Mozambique (10%), Bharat Petroresources Limited (BPRL) Ventures Mozambique (10%), and PTTEP Mozambique Area 1 (8.5%).

Beas Rovuma Energy Mozambique (BREM) is a joint venture between ONGC Videsh (60%) and Oil India Limited (OIL, 40%), while BPRL is a wholly-owned subsidiary of Bharat Petroleum, another state-controlled oil and gas company of India.

Mozambique Area-1 LNG Facility

The Mozambique Area-1 LNG facility will consist of two liquefaction trains with a combined nameplate capacity of 12.88Mtpa in the initial phase. It will also house gas pre-treatment facilities and full-containment LNG storage tanks.

The LNG production capacity of the facility is proposed to be further expanded up to 50Mtpa in future.

The plant will receive feed gas supply from the Golfinho-Atum gas field through pipeline and produce LNG for export to the Asian and European markets, as well as for domestic consumption in Mozambique.

Other support facilities for the LNG plant will include materials offloading facility and an LNG marine terminal capable of accommodating large LNG carriers, which will also be shared with upcoming Area 4 LNG projects.

LNG off-take Plan

Mozambique Area-1 LNG project is backed with 11.1Mtpa of long-term LNG off-take agreements.

The customers for the project include Electricity de France (EDF, 1.2Mtpa), Japan’s JERA and Taiwan’s CPC Corporation (1.6Mtpa), CNOOC Gas and Power Singapore (1.5Mtpa).

Similarly, Tokyo Gas and Centrica (2.6Mtpa), Shell International Trading Middle East (2Mtpa), Bharat Petroleum Corporation (1Mtpa), and Indonesia’s Pertamina (1Mtpa) are also customers.

In addition, Anadarko signed a memorandum of understanding (MoU) with the Government of Mozambique in December 2015, to provide 100 million cubic feet of gas a day (Mmcfd) from the facility for domestic consumption.

Contractors and Suppliers

A consortium of McDermott, Chiyoda Corporation, and Saipem is responsible for the engineering, procurement, and construction (EPC) of the onshore liquefaction plant along with its support facilities.

The joint venture of CB&I (now McDermott), Chiyoda and Saipem (CCS JV) also provided the front-end engineering and design (FEED) for the LNG facility.

TechnipFMC, in consortium with Van Oord, is the engineering, procurement, construction, and installation (EPCI) contractor. This is for the offshore subsea system for the project.

Allseas will be engaged as a major subcontractor for the offshore installation works.

TechnipFMC will also provide subsea trees, subsea controls systems, production manifolds, subsea connectors, in addition to completion workover riser & installation workover control system for the subsea gathering system, through its subsidiary FMC Technologies.

Oceaneering International is the supplier of subsea umbilicals and distribution hardware, while Advanced Technology Valve will provide pipeline subsea ball and subsea gate valves.

Cameron Italy will supply the subsea chemical injection metering valves for the Mozambique Area-1 LNG project.

Mozambique Area 1 LNG Project Timeline

2011-2014

The environmental impact assessment (EIA) for the Area 1 Mozambique LNG project was carried out.

The Mozambican Ministry of Coordination of Environmental Affairs (MICOA) approved the EIA report in June 2014.

2017

The concessions to design, build and operate the marine facilities for the project were secured from the Government of Mozambique in July 2017

2018

The Government of Mozambique gave the final approval for the Area 1 Mozambique LNG development plan in March 2018.

2019

The final investment decision (FID) on the Mozambique LNG project, which is estimated to cost approximately US $20bn, was taken in June 2019. Construction works on the integrated LNG project were started in August 2019. The start of production is scheduled for 2024.

2020

The African Development Bank (AfDB) concluded its bid to co-finance the construction of Mozambique’s integrated Liquefied Natural Gas (LNG) plant by signing a senior loan of US $400m for the project.

In August, the government of Mozambique signed a security pact with Total to support the development of the US $20bn Mozambique LNG project amid an insurgency linked to Islamic State.

According to the pact, a joint task force will ensure the security of Mozambique LNG project activities in the Afungi site, and across the broader area of project operations. Mozambique LNG will provide logistic support to the joint task force which will ensure human rights principles are respected.

In September, the US through the International Development Finance Corporation (DFC) agreed to provide up to US $1.5bn in political risk insurance to support the commercialization of natural gas reserves in Mozambique’s Rovuma basin.

The insurance is to cover the construction and operation of an onshore natural gas liquefaction plant and support facilities being developed by energy giants including American firm ExxonMobil, French’s Total and Italian’s Eni.

In mid-September, Total CEO Patrick Pouyanné and Mozambican president Filipe Nyusi met to discuss an intensifying security risk in the country’s north, where the project is located.

The insecurity is now creeping towards the project; recent videos that appear to show abuses, including torture and executions of civilians, by Mozambique’s army suggest the Cabo Delgado province has become increasingly lawless.

In October, Bharat Petroleum Corporation (BPCL) tied up a 15 year long term contract for 1 million tonne per annum (mtpa) LNG from its much awaited Mozambique project. BPCL owns 10% in the 12.88 mtpa project offshore the Mozambique basin where OVL and Oil India are the other consortium partners, while French energy giant Total is the operator.

In the same month, CCS JV, a joint venture between Saipem and McDermott selected Siemens Energy to supply emissions-reducing power generation equipment and boil-off gas compressors for.

The equipment order comes just weeks after an agreement was signed between Total and Siemens Energy to advance new concepts for low-emissions LNG production.

As part of the contract, Siemens Energy is conducting studies to explore a variety of possible liquefaction and power generation plant designs, with the goal of decarbonizing LNG facility development and operation.

In late October an executive from project operator Total confirmed that the project is on track to produce its first cargo in 2024 despite pandemic disruptions globally.

2021

In January, Total-led Mozambique LNG Project announced that it has temporarily reduced its workforce on site in response to the prevailing environment, including ongoing challenges associated with COVID-19 and the security situation in northern Cabo Delgado.

The northern province of Cabo Delgado, which has major gas resources, has been the scene of a bloody jihadist rebellion for more than three years. However in recent weeks there have been intensifying attacks near the gas site on the Afungi peninsula.

Conclusion

If you would like to work in this Mozambique Area-1 LNG Project, and if it’s something you want to improve in continually, then you can have a more secure footing in your space.

The LNG projects in Mozambique provide you with an opportunity for work. As an entrepreneur, you can apply to secure a contract in the many areas the project will require supply of goods or services.

Local content in Mozambique Area 1 is of great importance. There are programs aimed an ensuring implementation of local content. It is also critical that local businesses explore financing opportunities that leasing provides.

In conclusion, keep updating yourself with knowledge, insights and the latest in the oil and gas industry in Mozambique.

Stay connected with your audience, expand your product offerings, and give the best customer service that you can, and it will set you apart from the others in this oil and gas industry.