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GLNG COMMENTARY GLNG
The other partners in the project are Mitsui with a 20% stake, ONGC Videsh Ltd (OVL), Beas Rovuma Energy Mozambique – a joint ven- ture between OVL and Oil India Ltd (OIL) – and Bharat PetroResources Ltd (BPRL) with a 10% interest each, and Thailand’s PTT Exploration & Production (PTTEP) with 8.5%.
Around 90% of Mozambique LNG’s output has already been sold under long-term contracts, which are largely oil-indexed.
Momentum
Mozambique’s nascent LNG industry is gaining momentum, with the country hopeful that its abundant gas resources and geographical loca- tion make it well-placed to supply gas to Asia and beyond. A second planned project, the Exxon- Mobil-led Rovuma LNG, is progressing towards an FID, which is anticipated by April 2020.
Last month, the project’s developers awarded the engineering, procurement and construction (EPC) contract worth $9.2bn to a consortium comprising Fluor, JGC and TechnipFMC.
ENH also has a stake in Rovuma LNG, but according to Mitha the cost of its share is still being discussed, as project expenses have risen.
Rovuma LNG will use production from Area 4 as feedstock. Gas from Area 4 will also be used to supply a third plant, Eni’s Coral South floating LNG (FLNG) project, which is currently under construction and scheduled to enter service in 2022.
“Combined, these investments are expected to position Mozambique as the world’s fourth largest producer of LNG, supplying a quarter of the world’s LNG needs and adding $15-18bn to the country’s GDP each year,” said Mitha. He identified China as a prime market for Mozambique’s LNG exports, with the Asian
country’s demand rising as it seeks to combat air pollution.
“If we get it right, Mozambique is in a position to become a long-term leading supplier of LNG to the world’s second largest economy,” Mitha said.
Indeed, his comments come as the trade war between the US and China continues to restrict LNG trade severely between the two. However, US Secretary of Commerce Wilbur Ross said this week that LNG could form part of an interim trade deal between the two countries that is cur- rently being negotiated. If these negotiations are successful, Mozambique’s LNG exporters will face increased competition from US suppliers of the fuel.
Mozambique has other target markets in
its sights, though, with Mitha noting that these ENH has
include Japan and South Korea.
As it steps up its efforts to market Mozam-
partnered with commodity trader Vitol to launch
bican LNG, ENH has partnered with commod-
ity trader Vitol to launch ENH Energy Trading.
The joint venture will initially be owned 51% by
ENH and 49% by Vitol, but the Mozambican
company is expected to increase its stake over ENH Energy time.
The formation of the company, which will be based in Singapore – illustrating Mozam- bique’s focus on Asian markets – is aimed at ena- bling ENH to develop expertise in commodity trading.
“Our marketing collaboration with Vitol is based upon ‘build, operate and transfer’ prin- ciples, aimed at eventually equipping ENH to manage ENH Energy Trading on a stand-alone basis,” said Mitha.
The start-up of LNG exports from the coun- try is still over two years away, but the pieces appear to be falling into place.™
Trading.
China is considered a prime market for Mozambique’s LNG exports.
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w w w . N E W S B A S E . c o m Week 44 07•November•2019