Page 9 - GLNG Week 47

GLNG AFRICA GLNG
AfDB approves $400mn Mozambique LNG loan
INVESTMENT
THE African Development Bank (AfDB) has approved a $400mn long-term senior loan to support the Mozambique LNG project, which is being developed by a consortium led by France’s Total.
The AfDB said in a November 26 statement that by approving the loan it was joining a global syndicate of commercial banks, development finance institutions and export credit agencies that will provide debt financing for the project. Financial close for the transaction is expected during the first half of 2020.
The Mozambique LNG project is Africa’s single largest foreign investment to date accord- ing to the AfDB. The project is expected to cost around $23bn, with first production anticipated in 2024. Mozambique is counting on the project to revive its economy, having struggled to service its debt.
The AfDB’s president, Akinwumi Adesina, said the bank was aiming to support Mozam- bique’s bid to go from a developing country to a developed one.
“Working closely with the government of Mozambique, we can ensure that the local population reaps the benefits from its nascent natural gas value-chain, thus creating growth
opportunities and widespread industrialisation, while at the same time accelerating regional inte- gration across Southern Africa,” Adesina added.
The bank noted that supporting the Mozam- bique LNG project aligns with three its “High 5” strategic priorities. These include industrial- ising Africa, boosting power generation locally and regionally and improving the quality of life for people on the continent through job creation and other means.
The 12.88mn tonne per year (tpy) Mozam- bique LNG project was initially led by Anadarko Petroleum, but after that company’s acquisition by Occidental Petroleum the stake was sold to Total earlier this year. As well as Total and Mozambique’s state-owned ENH, several Asian players – Mitsui, Oil India Ltd (OIL), ONGC Videsh Ltd (OVL), Bharat Petroleum and PTT Exploration and Production (PTTEP) – are par- ticipating in Mozambique LNG’s development.
Eight long-term offtake contracts for the pro- ject have already been signed. Buyers include Bharat, the UK’s Centrica, China National Off- shore Oil Corp. (CNOOC), Taiwan’s CPC, Elec- tricite de France (EDF), Japan’s JERA, Tohoku Electric and Tokyo Gas, Indonesia’s Pertamina and Royal Dutch Shell.™
AMERICAS
Gunvor to market Commonwealth LNG output
PROJECTS & COMPANIES
EUROPEAN-HEADQUARTERED Gunvor Group agreed this week to double the maximum amount of LNG that it would buy from the pro- posed Commonwealth LNG project in Lousi- ana, on the US Gulf Coast.
The commodity trader said in a Novem- ber 25 statement that it had agreed to help Commonwealth LNG to secure binding LNG offtake and gas supply agreements for the full capacity of the planned facility. It will also buy up to 3mn tonnes per year of LNG from the project, which would have a total capacity of 8.4mn tpy itself.
A final investment decision (FID) could be made on the $4bn Commonwealth LNG in the first quarter of 2021, with exports then starting in the second quarter of 2024.
The deal with Gunvor allows Common- wealth to shift the burden of finding buyers on to a third-party marketer, differentiating the pro- ject from other LNG export facilities. It comes as developers are increasingly willing to explore new models for securing enough offtakers to justify building new projects. Competition in themarketisintensifyingasnewsupplycomes
online, while buyers are pushing for more flexi- bility in how they secure volumes.
Meanwhile, commodity traders are becom- ing more prominent in the LNG trade, with the fuel being increasingly commoditised. Com- monwealth’s president and CEO, Paul Varello, described Gunvor as the most active LNG trader in the world. Indeed, Gunvor is on course to lead LNG ship charters this year. The combination with Gunvor “ultimately differentiates Com- monwealth from every other US LNG project currently chasing FID”, Varello added.
“In this highly competitive market, it is crit- ical for companies – particularly ones pursuing an LNG greenfield project – to recognise their core competencies and strengths,” Gunvor’s co-head of LNG trading, Kalpesh Patel, said in a statement. “Commonwealth LNG’s engineering and procurement team is best in class. And now, with the comprehensive support of Gunvor’s LNG and US Gas marketing team, Common- wealth LNG will excel not only at controlling costs and project execution, but also at commer- cialising their project and creating the lowest costofferingontheUSGulfCoast.”™
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