Another partner gives financing nod for Coral South FLNG

Mozambique’s state-owned energy firm Empresa Nacional de Hidrocarbonetos (ENH) has given its approval for the financing of the development of the Coral south FLNG project.

The approval comes less than a week after Italian oil and gas firm Eni, which is the operator of the Coral offshore gas discovery, gave its financing approval for the project.

The Area 4, located in the deep waters of the Rovuma Basin, contains the giant Coral South gas field for which the investment decision was made by Eni’s board of director last week.

Mozambican media have reported that the expected total investment for the project will be $8 billion, of which ENH will provide $800 million.

ENH owns a 10 percent stake in the project. Eni operates the offshore Area 4 with a 50 percent indirect interest, owned through Eni East Africa (EEA), which holds a 70 percent stake of Area 4. The remaining 20 percent stake in EEA is owned by China’s CNPC. EEA’s partners in Area 4 are Galp, Kogas, and ENH with a 10% stake each.

All the partners need to give their financing approvals before the Final Investment Decision (FID) is made. The FID is expected to be reached by the end of 2016.

The FID will represent the first phase of development of 5 trillion cubic feet of gas in the Coral discovery in deep waters some 80 kilometers offshore of the Palma bay in the northern province of Cabo Delgado.

The giant discovery, made in May 2012 and outlined in 2013, proved the existence of a high quality field of Eocenic age with excellent productivity. It is estimated to contain 15 trillion cubic feet of gas in place, wholly located in Area 4.

Eni in October secured a major push towards the Final Investment Decision. Namely, Eni and its partners in the Area 4 concession have managed to find a major customer for the gas to be produced there – British energy major BP.

Under the agreement, BP will buy all the LNG to be produced by Eni’s Coral South Floating LNG unit, which will be installed offshore Mozambique, over a period of 20 years. Commercial details of the agreement were not disclosed.

Offshore Energy Today staff