BP and the Area 4 concession partners, ENI East Africa (EEA), Galp Energia (Galp), Kogas and Empresa Nactional de Hidrocarbonetos (ENH), have entered into a sales and purchase agreement for BP to purchase 100% of the liquefied natural gas (LNG) produced by the EEA-operated Coral South floating LNG facility. Mozambique LNG is expected to be ready for first exports by 2020.
The agreement covers the purchase of Mozambique LNG for over 20 years. The agreement, which has been approved by the government of Mozambique, is conditional on the final investment decision being taken for the project, which is currently expected by the end of 2016. The Coral South Floating LNG facility is expected to have a capacity above 3.3 million tonnes per annum.
BP will use LNG from the contract to help meet its global supply commitments.
Paul Reed, chief executive of BP’s supply and trading business, said:
“BP is pleased to play a key role in enabling Mozambique to be an LNG exporting country. The agreement adds to the diversity of our natural gas portfolio beyond the end of the decade, further enhancing our ability to meet the needs of our customers.”
Commercial details of the agreement were not disclosed by the partners. However, the deal is regarded as a major boost to ENI’s plans for producing natural gas off Mozambique.
Mozambique LNG exports by 2020
In 2015, ENI’s chief executive officer said that the company aims to begin Mozambique LNG exports by 2020. ENI’s gas discoveries alone could provide 30 years worth of fuel for Italy, underlining the size of the field. First exports are also expected to provide an important boost to Mozambique’s economic development.
More information about ENI’s activities related to Mozambique LNG is available on the company website. The South African Institute of International Affairs has published a study about the exploitation of natural gas discoveries offshore Mozambique and the relationship with the ‘blue economy’ development in the country.