MITSUI FINAL INVESTMENT

The Japanese company Mitsui does not expect to take its final investment decision on the liquefied natural gas (LNG) project in the northern Mozambican province of Cabo Delgado until April-June 2018, according to a Wednesday report from the Reuters news agency.Mitsui holds a 20 per cent stake in Area One of the Rovuma Basin, off the Cabo Delgado coast. The operator of Area One is the Texas-based company Anadarko, with a 26 per cent stake. The other partners in the consort are ONGC Videsh and BRPL Ventures of India (20 per cent and 10 per cent, respectively), the Thai Group PTT (8.5 per cent) and Mozambique’s own National Hydrocarbons Company, ENH (15 per cent).

Anadarko estimates the known recoverable reserves of natural gas in Area One at 75 trillion cubic feet. It plans to produce LNG in two factories (known as trains) onshore, in the Afungi Peninsula in Palma district. Those factories will produce 12 million tonnes of LNG a year. Construction can only begin once all the partners have taken their final investment decision. Building the two trains will take around four years, and so the start of LNG production will not be before 2022. 'We had hoped to have finalised the negotiations with (the) Mozambican government by December,' Hirotatsu Fujiwara, Mitsui's Executive Managing Officer, told Reuters on the sidelines of a gas conference in Chiba, Japan. 'We are four months behind.'

The partners in the Anadarko consortium are in talks with Japanese power and gas utilities, aiming to finalize binding long-term offtake agreements within a year, Fujiwara said.

The project has secured more than 8 million tonnes a year (mtpa) of non-binding long-term commitments. It needs to secure binding commitments to account for about 80 percent of the total 12 mtpa capacity to get the necessary funding for a final investment decision, he said.Fujiwara said Qatar's decision to restart development of the world's largest natural gas field, North Field, was a surprise but would not likely have a significant impact on the Rovuma Basin project because it had already taken into account a substantial growth in demand beyond 2025.It is likely that the second Rovuma Basin consortium, that in Area Four, led by the Italian energy company ENI, will start production before the Anadarko consortium. ENI and its partners have all, with the exception of the China National Petroleum Corporation (CNPC), taken their final investment decisions.ENI intends to build a floating LNG facility above the Coral South gas field in Area Four. It has signed a contract to sell the LNG from Coral South to BP-Poseidon, a subsidiary of British Petroleum. This contract covers the sale of all LNG from Coral South for 20 years.