Page 13 - GLNGl Week 24

GLNG AFRICA GLNG

Audit shows Sasol may owe

back taxes in Mozambique

POLICY SOUTH Africa’s Sasol may owe back taxes in payments due, STV explained.
Mozambique, where it has allegedly overstated As of press time, neither Sasol nor the
its recoverable costs. According to a report from Mozambican government had commented on
the independent television channel STV, Sasol the television channel’s report.
declared that its recoverable costs for opera- Mozambique’s Ministry of Economy and
tions in Inhambane Province had reached of Finance named Sasol as the best corporate
The GCE audit $148.7mn and $114.4mn in fiscal years 2017 and income tax payer in the country in 2016 and 2017.
results may also have 2018 respectively. But the preliminary results of According to STV, the GCE audit results may
consequences for other the 2019 General State Account (CGE), an audit also have consequences for other investors seek-
investors seeking to ordered by the Mozambican Ministry of Econ- ing to extract natural gas from Mozambique’s
extract natural gas from omy and Finance, indicate that those numbers Rovuma Basin, though on a smaller scale. Ita-
Mozambique’s Rovuma were inflated, the channel said. ly’s Eni, which is developing the offshore Area
Basin, though on a The 2019 CGE audit shows that $50.5mn 4 block within the framework of the Coral
smaller scale. of the costs reported by Sasol in FY 2017 were South LNG project, put its recoverable costs at
not actually eligible for recovery, STV reported. $1.095bn between 2015 and 2017, and some
Another $49.3mn of the costs reported for FY $22.2mn of the total has been deemed ineligi-
2018 were similarly ineligible, it said. ble, the channel said. Total, which is developing
Assuming that these numbers are correct, Area 1 within the framework of the Mozam-
Sasol appears to have overstated its recovera- bique LNG project, claimed recoverable costs of
ble costs by around $99.8mn during the years $904.7mn for the 2015-2017 period and has had
covered by the audit. If so, the cost inflation $11.2mn declared ineligible, it added.
will affect the company’s tax obligations, since Eni and Total have also not commented on
Mozambique deducts recoverable costs from tax the audit’s findings.™

AMERICAS

Venture Global takes steps

forward on second plant

PROJECTS & US-BASED Venture Global LNG has been noted that if Plaquemines goes ahead, it could be
COMPANIES authorised by regulators to proceed with limited the only US LNG project to enter construction in
site preparation for its Plaquemines LNG project 2020 after most other developers delayed their
in Louisiana. According to the company’s web- own plans.
site, early construction work at Plaquemines Plaquemines LNG would have a capacity of
is scheduled to kick off in mid-2020, ahead of 20mn tpy, and has been estimated by analysts
financial close on the project late this year. The to cost around $8.5bn. Venture Global says the
project would enter service in 2023. facility would have an identical configuration to
Venture Global already has another export Calcasieu Pass LNG. The company has signed
Construction is already terminal under construction in Louisiana – the 20-year sales and purchase agreements (SPAs)
underway on Venture 10mn tonne per year (tpy) Calcasieu Pass LNG, with France’s EDF and Poland’s PGNiG for vol-
Global’s Calcasieu Pass which is due to enter service in late 2022. The umes from Plaquemines.
LNG terminal. company has reported that it recently raised Venture Global also had a third planned
the roof on the second LNG storage tank at the Louisiana export terminal in the works. The
Calcasieu Pass site. In addition, Venture Global Delta LNG project would also have a capacity of
said in May that the first modules for the export 20mn tpy, though it may be constructed in two
facility’s 720-MW combined cycle gas turbine 10mn tpy phases. According to Venture Glob-
(CCGT) power plant had arrived at the site. al’s website, construction is pegged to begin in
The Calcasieu Pass project is estimated to cost the second half of 2021, assuming all regulatory
around $4.5bn. approvals are obtained on schedule.
The company’s push to advance construction It would be surprising, however, if all of the
on a second – and larger – project comes as the company’s plants proceed as currently scheduled
LNG industry is struggling to absorb a global given the scepticism over the potential for new
oversupply amid low demand. Indeed, Reuters projects to enter the market in the medium term.™

Week 24 19•June•2020 www. NEWSBASE .com P13