ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, holds 16% stake in Rovuma Area 1 where recoverable resources in excess of 75 trillion cubic feet have been established.
Oil and Natural Gas Corp (ONGC) and its partners will invest about $24 billion (approximately Rs 1.59 lakh crore) to produce natural gas from a giant field off Mozambique and converting it into liquid fuel (LNG) for export by ships to consumers like India.
ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, holds 16% stake in Rovuma Area 1 where recoverable resources in excess of 75 trillion cubic feet have been established.
BPCL holds another 10% and Oil India Ltd 4% stake in the field and all three together hold more stake than operator Anadarko of the US (26.5%).
"The Mozambique government has passed a decree law, paving way for start of construction work on the project. An estimated $23-24 billion will be required to bring first set of discoveries in Rovuma Area-1 on to production and convert that gas into LNG," a senior official in the consortium said.
The partners have so far committed $16 billion (approximately Rs 1.06 lakh crore) and hope to achieve financial closure of the remaining by December or early January, he said.
They are planning to produce first gas from first quarter of 2020. The gas will be turned into liquefied natural gas (LNG) at an onshore liquefication plant and exported in cryogenic ships to consumption centres like India.
Initial plan of development of Area-1 envisage developing two LNG trains of about 6 million tonnes per annum each from the Golfinho-Atum Field in Area-1.
"The decree law essentially means that the cost of bringing the gas field to production as well as building of liquefaction (LNG) plant will be cost recoverable i.e., all investments will be recouped from sale of gas first before profits are shared with Mozambique government," he said.
The project will have an ultimate capacity to produce 20 million tonne of LNG annually and will be the world's largest LNG export site after ExxonMobil-run Ras Laffan in Qatar.
Rovuma Area-1 Offshore Mozambique Block (Block Area 1) is located along the coasts of northern Mozambique and southern Tanzania in the Indian Ocean. It has a total area of more than 10,000 square kilometre in water depths ranging from 900 metre to 1,600 metre and about 30-60 km from shore.
Woodlands, Texas-based energy-exploration company Anadarko is the operator of the block with 26.5% stake while other partners include Mitsui (20%), ENH (15%) and PTTEP (8.5%).
So far, seven gas fields have been discovered in the block. Of these, three fields -- Lagosta, Windjammer and Barquentine (collectively called the Prosperidade field) -- extend into the adjacent Block Area-4 where Italy's ENI with a 70% is the operator.
The others -- Atum, Golfinho and a small field Tubarao -- are independent fields lying fully in Block Area-1.
The official said the consortium is looking at developing the independent fields first.
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