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UKEF set to back Mozambique LNG

MOZAMBIQUE THE UK’s export credit agency UK Export programme director at campaign group Oil
Finance (UKEF) is looking to provide up to Change International, told the agency. “The
Mozambique LNG is set $800mn in financing for the Total-operated UK should never finance another fossil fuel
to produce 13mn tpy Mozambique LNG project, Reuters reported on project if they are serious about being a cli-
of LNG from offshore June 25 citing sources. mate leader.”
Rovuma fields. The UKEF listed the project as a potential Total operates Mozambique LNG with a
candidate for investment last August, the news 26.5% stake, while its partners are Japan’s Mitsui
agency said. The agency has declined to com- E&P (20%), India’s ONGC Videsh Ltd (OVL)
ment on its possible support, citing commercial (10%) and BPRL Ventures Mozambique (10%),
confidentiality. local investors ENH Rovuma (15%) and Beas
Mozambique LNG is set to produce 13mn Rovuma Energy Mozambique (10%) and Thai-
tonnes per year (tpy) of LNG, using gas from the land’s PTTEP (8.5%). Together they arranged
Golfinho and Atum fields in the Rovuma Basin. $15bn in financing for the project’s first phase
The project, which carries a total cost of $23bn, in late May, according to Bloomberg. Around 20
is due to start exporting by 2024. commercial banks are expected to take part and
Total and others have looked to shift their are due to sign an agreement before the end of
focus from oil to gas, banking on expected strong June, paving the way for a final investment deci-
growth in demand for the latter over the coming sion (FID) to be taken.
decades. They have also promoted gas as a transi- Mozambique LNG is one of several LNG
tion fuel, as its use results in fewer emissions than export ventures under development off the East
oil. But environmentalists are unconvinced, and African nation’s coast. Another one is Rovuma
oppose UKEF’s support for Mozambique LNG, LNG, led by ExxonMobil, which anticipates
according to Reuters. reaching an FID next year. That plant will pro-
“By backing this massive fossil fuel duce up to 7.6mn tpy of LNG starting in 2025.
project, the UK would undermine their Exxon is also involved in the Eni-led Coral South
credibility as they prepare to host the UN project, which is due to enter service in 2022. It
climate negotiations next year,” Alex Doukas, will have a capacity of 3.4mn tpy. ™

Total extends LNG deal with Sonatrach

FRANCE FRANCE’S Total and Algeria’s Sonatrach have after Algeria blocked the sale of Occidental
agreed to extend their existing LNG supply part- Petroleum assets previously owned by Anadarko
Total has extended the nership by three years. As a result, Sonatrach will Petroleum to the French company.
deal by three years. continue to provide 2mn tonnes per year (tpy) of Total’s CEO, Patrick Pouyanné, said during
Algerian LNG to the French market, primarily the company’s first-quarter earnings call in May
through the import terminal at Fos Cavaou, on that it had been officially informed by Occidental
the southern coast of France. that it would not be able to acquire the Algerian
The agreement also includes the sub-charter assets on objections from Algiers. Occidental
of a Total LNG tanker by Sonatrach, the French is now expected to hold onto the assets, unless
company said in a June 25 statement. some new way to overcome Algiers’ opposition
“This agreement is part of the long history to the deal can be found.
of co-operation between Total and Sonatrach,” According to the International Group of LNG
Total’s president of gas, Laurent Vivier, stated. Importers (GIIGNL), Sonatrach and Total have
“Thanks to the quality of our relationship we two agreements dating from 1972 that were due
were able to conclude it in an extremely volatile to expire this year. Under these agreements, Total
market environment. This new contract further has been receiving 1.5mn tpy and 2.5mn tpy on a
enhances the flexibility of Total’s LNG portfolio delivered ex-ship (DES) basis.
and strengthens our position as a major partner The extension thus covers a smaller volume
of Sonatrach.” of LNG, but nonetheless is likely to be a welcome
In its own statement, Sonatrach echoed the development for Sonatrach as Europe increas-
message about the partners’ pre-existing rela- ingly diversifies its sources of gas supply. Indeed,
tionship, and how it had helped them to agree to the Algerian company has a number of contracts
the extension. However, Reuters reported, citing that will soon come up for expiry, including a
sources familiar with the situation, that relations 720,000 tpy deal with Greece’s DEPA, which is
between Sonatrach and Total had deteriorated due to end in 2021. ™

P12 www. NEWSBASE .com Week 26 02•July•2020