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Wood Mackenzie discusses Mozambique LNG

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LNG Industry,

Wood Mackenzie has released a statement discussing the recent sanctioning of the Mozambique LNG project.

Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa upstream team, said: “Mozambique LNG is one of two LNG mega-projects that have been seeking sanction for over four years in Mozambique.

“The other is the ExxonMobil-led Rovuma LNG development. With strong LNG demand growth out of Asia, now is Mozambique’s time.

“At US$20 billion, today’s FID is the largest sanction ever in sub-Saharan Africa oil and gas.

“We believe that, from the early 2030s, state revenue from Mozambique LNG alone will reach US$3 billion per annum, single-handedly doubling today’s revenue, as calculated by the IMF and World Bank.”

Lawrence went on to say that Wood Mackenzie expects the two Mozambique LNG projects to be the second and third most valuable oil and gas sanctions taken this year, after Arctic LNG-2 in Russia. He added that, as first development mover, the Anadarko joint venture will lead construction of shared aspects of the two onshore LNG projects.

Last month, Wood Mackenzie claims that Al Walker, Anadarko chief executive, said that the company would announce FID today. He spoke to reporters, stating that the decision came after the company had secured both financing and offtake agreements for the project.

Frank Harris, Head of LNG Consulting, at Wood Mackenzie, said: “Flexible commercial arrangements, including an innovative co-purchase agreement with Tokyo Gas and Centrica, have been instrumental in securing the project a roster of high-quality customers in a crowded LNG market.”

In the statement, Wood Mackenzie also notes that Anadarko is set to be taken over by Occidental Petroleum, which recently agreed to sell Anadarko’s sub-Saharan Africa upstream assets – including the company’s Mozambican holdings – to French major Total in a deal valued at US$8.8 billion. The transaction is reportedly contingent upon Occidental completing its acquisition of Anadarko, and is expected to close next year.

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