Japan Inc. to invest $14bn in LNG development in Africa
TOKYO -- The Japanese government and business sector will join hands on a joint financing deal totaling 1.5 trillion yen ($14.4 billion) for the development of liquefied natural gas in the African country of Mozambique, Nikkei has learned.
Under the deal, a syndicate of lenders including the Japan Bank for International Cooperation and the nation's top-three private sector banks will provide the loans, while Nippon Export and Investment Insurance will handle default risk.
The consortium believes that the deal presents an opportunity to secure stable production of LNG over the long term and diversify sources for Japan's LNG supply.
The arrangement calls for JBIC to lend $3 billion, while the remaining amount will be shared among the African Development Bank and Japanese private-sector banks, including MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking and Sumitomo Mitsui Trust Bank.
Loans provided by the private banks will be insured by NEXI, a Japanese government-affiliated insurer.
The deal is expected to be one of the largest ever overseas investments in Africa. Japanese general trader Mitsui & Co. and Japan Oil, Gas and Metals National Corp., or Jogmec, will invest a 20% share in the gas field to be developed in Mozambique.
Plans are for the gas field to start producing 12 million tons of LNG in 2024, of which about 30% will be supplied to Jera, a joint venture equally owned by Tokyo Electric Power Co. Holdings and Chubu Electric Power, as well as to Tokyo Gas and Tohoku Electric Power.
As deposits in the field are estimated to total over 10 times Japan's annual LNG imports, the companies expect it to produce a stable supply of the resource over many years.
History
Total closes acquisition of Anadarko’s share in Mozambique LNG
Total has announced the closing of the acquisition of Anadarko’s 26.5% operated interest in the Mozambique LNG project for a purchase price of USD 3.9 billion.
This closing comes after Total reached a binding agreement with Occidental on May 3, 2019, to acquire Anadarko’s assets in Africa (Mozambique, Algeria, Ghana and South Africa) and signed the subsequent Purchase and Sale Agreement on August 3, 2019. This first transaction follows receipt of all requisite approvals by the relevant authorities and partners.
“Mozambique LNG is one of a kind asset that perfectly fits with our strategy and expands our position in liquefied natural gas,” says Patrick Pouyanné, Chairman & CEO of Total. “As the new operator, we are fully committed to the Mozambique LNG project and we will bring the best of our human, technical, marketing and financial capacities to further strengthen its execution. Total will of course work on the strong foundations established by the previous operator and its partners, in order to implement the project in the best interest of all those involved, including the government and the people of Mozambique.”
Mozambique LNG is the country’s first onshore LNG development. The project includes the development of the Golfinho and Atum fields located within Offshore Area 1 and the construction of a two-trains liquefaction plant with a capacity of 12.9 million tonnes per year (Mt/y). The Area 1 contains more than 60 Tcf of gas resources, of which 18 Tcf will be developed with the first two trains. The Final Investment Decision (FID) on Mozambique LNG was announced on June 18, 2019, and the project is expected to come into production by 2024.
The Mozambique LNG project is largely de-risked since almost 90% of the production is already sold through long-term contracts with key LNG buyers in Asia and in Europe. Additionally, the project is expected to have a domestic gas component for in-country consumption to help fuel future economic development.
Total operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Ltd. (20%), ONGC Videsh Ltd. (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%).
Closing operations are still ongoing in relation to Anadarko’s assets in the other countries (Algeria, Ghana, South Africa).
Original source: https://energynorthern.com/2019/09/30/total-closes-acquisition-of-anadarkos-share-in-mozambique-lng/
The Mozambique LNG
The Mozambique LNG Project started with the discovery of a vast quantity of natural gas off the coast of northern Mozambique in 2010, leading to a $20 billion Final Investment Decision in 2019. Now, through cooperation and responsible project planning, the project is on track to deliver LNG in 2024.
For now, our plans for the approximately 65 trillion cubic feet of recoverable natural gas include a two-train project with the ability to expand up to 43 million tonnes per annum (MTPA).
The Project is operated by Total – the world’s second largest LNG player with a leading presence in Africa – which is uniquely qualified to ensure the Mozambique LNG Project helps to meet the world’s increasing demand for sustainable, reliable and cleaner energy sources.
The Project is committed to collaborating with Mozambican communities and government officials to safely develop these resources in a manner that protects the environment, encourages additional foreign investment, and contributes to the long-term social and economic stability of the country.
The Mozambique LNG Project will deliver a range of social and economic benefits to Mozambique.
Its geographic location positions the project well to meet Atlantic and Asia-Pacific market needs, as well as tap into the growing energy demands of the Middle East and Indian sub-continent.
In the short term, construction of the LNG facilities will provide opportunities for professional training, employment, and contracts for the supply of goods and services. The construction phase also manages environmental and social impacts and reduces risks.
In the medium-to-long term, the Mozambique LNG Project is foundational for diversifying Mozambique’s economic activities. The project will help to:
Develop competent construction and operation workforces
Develop subject matter experts that support those industries
Generate revenue that will contribute to the socio-economic development of the country
Mozambique Gas
In 2010–2011, Anadarko Petroleum and Eni discovered the Mamba South gas field, recoverable reserves of 4,200 billion cubic metres (150 trillion cubic feet) of natural gas in the Rovuma Basin, off the coast of northern Cabo Delgado Province. Once developed, this could make Mozambique one of the largest producers of liquefied natural gas in the world. In January 2017, 3 firms were selected by the Mozambique Government for the Natural Gas Development Projects in the Rovuma gas basin. GL Africa Energy (UK) was awarded one of the tenders. It plans to build and operate a 250 MW gas-powered plant. Production was scheduled to start in 2018.
As of 2020, Cabo Delgado, the site of three LNG (liquefied natural gas) projects, has fallen prey to a growing jihadi insurgency. Since 2017, over 100,000 people have been displaced as a result of the killings, kidnappings and beheadings that have engulfed the impoverished northern region.
