Mozambique government has approved the development plan for Golfinho-Atum natural gas field in Rovuma offshore basin, in which ONGC Videsh Ltd (OVL), Oil India Ltd (OIL), Bharat PetroResources Limited (BPRL) have stake. This paves a way for further investment into the natural gas field of southern African nation. The Indian companies are said to have invested over $6.5 billion into the project so far.
According to the industry insiders, the project has seen delays, primarily due to the fall in the global prices of gas in past few years and because of the slowdown in Mozambique’s economy. The development comes about four months after India's oil and gas minister Dharmendra Pradhan and his Mozambique counterpart Leticia Klemens agreed to expedite the project during a meeting on the sidelines of an industry summit in Tokyo.
As per OIL, the approval has been granted for the Golfinho-Atum natural gas field in the Area 1 block. It is one of the largest gas discoveries in offshore East Africa with estimated recoverable resources of approximately 75 trillion cubic feet. “The approval of the Development Plan is the culmination of several years of progress on technical and commercial aspects of the development,” OIL said in a statement.
The Golfinho-Atum project will be Mozambique's first onshore Liquefied natural gas (LNG) development. The plan outlines the integrated development of the Golfinho-Atum field through an initial two-train onshore liquefaction plant with a total processing capacity of 12.88 Million Metric Tonne Per Annum (MMTPA). This foundational project paves the way for a significant future expansion of up to 50 MMTPA from Offshore Area 1. The project is expected to supply initial volumes of approximately 100 million cubic feet of natural gas per day, for domestic sales in Mozambique.
According to BPRL, the wholly owned subsidiary of BPCL, with the approval of development plan on the back of other recent achievements, including completion of major legal and contractual framework agreements and commencement of implementation of resettlement action plan, Area 1 consortium continues to progress towards a Final Investment Decision (FID) on the LNG project.
BPRL Ventures Mozambique BV, an overseas subsidiary of BPRL, holds 10% in the concession. Anadarko Mozambique, a wholly owned subsidiary of Anadarko Petroleum Corporation, USA, is the operator of the project with 26.5% stakes. Other concessionaires in the project include Mitsui E&P with 20% stakes, ENH Rovuma with 15% stake, OVL with 10%, Beas Rovuma Energy Mozambique Ltd with 10% and PTTEP Mozambique with 8.5%. OIL, which is a sponsor in Area 1 Block, is also involved in the project through its 40% shareholding in BREML. The remaining 60% shares in BREML are held by OVL.
The experts say, though claim it to be a positive development, the delivery will take place three to four years from now. Also, the project would require further investment in excess of $20 billion, according to some estimates.
Anoop Bhatia, VP and sector head (corporate ratings) at rating agency ICRA termed it to be a positive development. "The step should help the consortium, including Indian upstream companies being part of it, to reach a final investment decision, which has been delayed due to multiple reasons including fall in LNG prices in last three years before recent recovery. At present, it will not have any impact on gas supply to India. The reason being that it will take another 3-4 years before the first supply of LNG starts from the said area in Mozambique. Also, global LNG supply is expected to be abundant over the medium term. Over the longer-term, increase in global LNG supplies with commissioning of LNG trains in Mozambique could be a positive for Indian gas marketers, planned regasification terminals and consumers".
TAKING IT FURTHER
- OVL, OIL, BPRL have stake in Golfinho-Atum natural gas field
- It is one of the largest gas discoveries in offshore East Africa
- The Indian firms are said to have invested over $6.5 billion into the project so far
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