Page 14 - DMEA Week 37

DMEA LNG DMEA

DFC clears $1.5bn in risk insurance

for Area 4 gas project

MOZAMBIQUE THE board at US International Development Coral South floating LNG (FLNG) project at
Finance Corp. (DFC) has signed off on $1.5bn in Area 4, sanctioned in 2017 and expected online
The project will raise political risk insurance for the Area 4 gas devel- in 2022.
Mozambique’s GDP by opment off Mozambique. Islamic State and other extremist groups have
$15bn annually. Area 4 contains some 2.4 trillion cubic led an insurgency in gas-rich northern Mozam-
metres, with development led by ExxonMobil bique over the past three years, and attacks have
and Italy’s Eni. The pair aim to bring on stream increased in frequency and ferocity in recent
two separate LNG projects over the next four months. This has posed a threat to the region’s
years, with a combined output of 18.6mn tonnes multi-billion dollar LNG projects.
per year (tpy). In late June, workers from a private construc-
The gas project will expand Mozambique’s tion firm hired at the 13.1mn tpy Mozambique
GDP by an average of $15bn per year, the DFC LNG project led by France’s Total were ambushed
said, “positioning one of the world’s poorest and killed by gunmen. And in August, militants
countries to achieve lasting, long-term economic seized control Mocimboa de Praia, the main port
growth.” The corporation’s insurance will cover of entry for the project’s equipment and other
development, construction and operation of an supplies. Total later that month formed a secu-
onshore liquefaction plant and supporting facil- rity pact with the Mozambique government to
ities, it said. 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
see upstream development. The companies each is due to go into operation by 2023. Mozam-
have 25% shares in Area 4, while China’s CNPC bique wants to utilise more of its gas resources to
owns a 20% interest. Mozambique’s national oil diversify 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 government
Eni is also taking the lead at the 3.4mn tpy has said. ™

P14 www. NEWSBASE .com Week 37 17•September•2020