Page 14 - GLNG Week 42

GLNG AFRICA GLNG

Bank of Mozambique publishes

plan for establishing gas fund

INVESTMENT MOZAMBIQUE’S central bank has publicised contributions to fiscal stabilisation programmes
its plan to set up a new sovereign wealth fund in order to lessen the country’s vulnerability to
for future earnings from natural gas and LNG instability on commodity markets. “The fund
projects. will build savings and contribute to fiscal stability
In a document published last week, the Bank when commodity prices fluctuate,” the bank said.
of Mozambique noted that the country’s gas In the document, the Bank of Mozambique
reserves have been estimated at 277 trillion cubic explained that the government intended to
feet (7.844 trillion cubic metres), large enough deposit 50% of its share of gas revenues in the
to generate sizeable revenues that could trans- fund during the first two decades after commer-
form the country’s economy. Gas production is cial production begins, with the balance to be
on track to begin in 2022, and the Mozambican reserved for the state budget. Subsequently, it
government’s share of earnings from ongoing said, 80% of the state’s share of earnings will go to
and future projects may reach $96bn, it said. the fund and 20% will go to the budget.
Maputo decided in 2019 to deposit a portion In years when government revenues are 10%
of its gas revenues in a sovereign wealth fund, or more below the target level, Maputo will be
the document said. It chose to follow that course permitted to withdraw up to 4% of the previous
in March 2019, when Mozambican officials met year’s gas income from the fund in order to cover
with representatives of sovereign wealth funds the gaps, it added.
from other countries in a seminar convened in The bank also reported that the fund would
co-operation with the International Monetary be managed by the Ministry of Economy and
Fund (IMF). Finance and audited annually by an independent
The fund will have two primary goals. First, it company. Additionally, it stated that it had been
will seek to maximise the value of its holdings so tasked with processing the fund’s operations,
that gas revenues can be a source of state fund- implementing the fund’s investment policy and
ing for several generations. Second, it will make providing quarterly updates for auditors.™

AMERICAS

YPF to pay Exmar $150mn to exit Tango charter

PROJECTS & ARGENTINA’S national oil company (NOC) where Tango FLNG can no longer operate
COMPANIES YPF has reportedly agreed to pay Belgium’s profitably.
Exmar $150mn in compensation for the early Initially, Exmar criticised this move, saying it
termination of a charter agreement for the Tango “[considered] the notice to be unlawful.” Subse-
floating LNG (FLNG) vessel. quently, though, it entered into negotiations with
In a statement, Exmar reported that the set- YPF.
tlement with YPF had taken effect on October The Tango FLNG facility, previously known
19. It noted that the NOC had already made its as Caribbean FLNG, was built in 2017 for a
first payment of $22mn and would pay off the project in Colombia that later failed. YPF then
balance of $128mn in 18 monthly instalments. signed a 10-year contract with Exmar in Novem-
As a result, YPF has exited from the 10-year ber 2018, saying it would use the vessel to liq-
charter, which is estimated to be worth around uefy and export natural gas from its fields in the
$500mn. As a result, it will no longer have to pay Vaca Muerta shale formation. At the time, it said
the daily rate of $140,000 for the use of the FLNG it expected Tango FLNG to turn out up to eight
unit, which forms the main part of the Escobar LNG cargoes per year over the 10-year term of
LNG terminal near Buenos Aires. the deal.
Exmar has been serving as a service contrac- The floating liquefaction plant, which can
tor to Excelerate Energy, the Belgian company produce 500,000 tonnes per year (tpy) of LNG,
that operates the terminal. It has not received has loaded four commercial cargoes since
any payments under the charter agreement November 2019. Operations began slow-
since YPF declared force majeure in April. The ing down in March, when YPF began taking
NOC explained its decision by pointing to the emergency measures, including the suspen-
coronavirus (COVID-19) pandemic, which sion of non-critical activities, in response to
has reduced global energy demand to the point the pandemic.™

P14 www. NEWSBASE .com Week 42 23•October•2020