Page 14 - AfrOil Week 37
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AfrOil INVESTMENT AfrOil
The company expects to use the remainder of the Atlantic Basin at large.
the proceeds to reduce borrowings outstanding It may also help the company reduce its
under its credit facilities,” it added. capital expenditures, as well as its general and
The sale will allow Kosmos to focus on West administrative outlays, by as much as $125mn
Africa and the Gulf of Mexico, rather than on over the next two years.
Area 4 lies offshore Mozambique (Image: Anadarko Petroleum)
DFC clears $1.5bn in risk insurance for
Area 4 gas project offshore Mozambique
MOZAMBIQUE THE board at US International Development floating LNG (FLNG) project at Area 4, sanc-
Finance Corp. (DFC) has signed off on $1.5bn in tioned in 2017 and due online in 2022.
political risk insurance for the Area 4 gas devel- Islamic State and other extremist groups have
opment off Mozambique. Area 4 contains some led an insurgency in gas-rich northern Mozam-
2.4 trillion cubic metres, with development led bique over the past three years, and attacks have
by ExxonMobil and Italy’s Eni. The pair aim to increased in frequency and ferocity in recent
bring on stream two separate LNG projects over months. This has posed a threat to the region’s
the next four years, with a combined output of multi-billion dollar LNG projects.
18.6mn tonnes per year (tpy). In late June, workers from a private con-
The gas project will expand Mozambique’s struction firm hired at the 13.1mn tpy Mozam-
GDP by an average of $15bn per year, the DFC bique LNG project, led by France’s Total, were
said, “positioning one of the world’s poorest ambushed and killed by gunmen. In August,
countries to achieve lasting, long-term eco- militants seized control Mocimboa de Praia,
nomic growth.” The corporation’s insurance will the main port of entry for the project’s equip-
cover development, construction and operation ment and other supplies. Total later that month
of an onshore liquefaction plant and supporting formed a security pact with the Mozambique
facilities, it said. government to help protect its $20bn venture.
ExxonMobil and Italy’s Eni expect to com- The DFC’s board has also agreed to provide a
mence production in 2024 from the 15.2mn $200mn loan to Mozambique’s Central Termica
tpy Rovuma LNG project that will be supplied de Temane to build a 420-MW gas-fired power
with Area 4’s gas. But a final investment decision plant, the lender said last week. The funds will
(FID), due to be taken this year, has been delayed also cover construction of a 25-km pipeline to
until 2021 in light of the market collapse. connect the facility with the grid.
ExxonMobil will manage the construction The plant will supply electricity to Mozam-
and operation of Rovuma LNG’s gas liquefaction bique’s major demand centres via a 560-km
and related facilities, whereas Eni is set to over- cable, which obtained financing last year and is
see upstream development. The companies each due to go into operation by 2023. Mozambique
have 25% shares in Area 4, while China’s CNPC wants to utilise more of its gas resources to diver-
owns a 20% interest. Mozambique’s national oil sify its energy mix, which currently consists
company (NOC) ENH, South Korea’s KOGAS mostly of coal and hydropower. Using gas will
and Portugal’s Galp each have 10% stakes. also lower energy costs for users, the govern-
Eni is also leading the 3.4mn tpy Coral South ment has said.
P14 www. NEWSBASE .com Week 37 16•September•2020
