ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corporation (ONGC), Tuesday said it, along with its partners, has signed agreements to sell 8.1 million tonne of LNG from the Mozambique project to firms such as Shell, Tokyo Gas and China's Cnooc.
OVL, which holds 16 per cent stake in the giant Mozambique Rovuma Area-1 gas field, and its partners had previously sold about 1.5 million tonne out of the 12.88 million tonne a year of liquefied natural gas (LNG) likely to be produced from the project in the first phase by 2022-23, the company said in a statement.
As many as five natural gas discoveries have been made in the 10,000-square kilometre Area 1, located in the northern-most part of offshore Mozambique Rovuma Basin. The finds have a combined recoverable resource of about 75 trillion cubic feet, most of which will be liquefied for ease of transportation in ships.
Area-1 represents one of the largest natural gas discoveries in offshore East Africa and has the potential to become one of the world's largest LNG producing hubs.
"Mozambique LNG1 Company Pte Ltd, the jointly owned marketing entity of OVL and joint venture partners of Mozambique Rovuma Offshore Area 1 project incorporated at Singapore, has entered into a long-term LNG sale and purchase agreement (SPA) with Tokyo Gas Co Ltd and Centrica LNG Company Ltd for sale of 2.6 million tonnes per annum (MMTPA) from the start-up of production until the early 2040s," it said.
The agreements have also been signed with CNOOC Gas and Power Singapore Trading & Marketing Pte Ltd (CNOOC) for 1.5 MMTPA for a term of 13 years, Shell International Trading Middle East Ltd (Shell) for 2 MMTPA for 13 years, Bharat Gas Resources Ltd, a wholly owned subsidiary of Bharat Petroleum Corporation Ltd, for 1 MMTPA for 15 years, and Pertamina, a state-owned oil and gas company of Indonesia, for 1 MMTPA for 20 years, it added.
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The latest deals "build upon previously executed deals for long-term offtake of LNG from Rovuma Offshore Area 1 project and take long-term sales to more than 9.5 MMTPA," the statement said.
Strategically located off the east coast of Africa, the Mozambique Rovuma Offshore Area 1 project is OVL's key natural gas project.
The company said the project is progressing towards developing initially an onshore LNG plant consisting of two LNG trains with a total nameplate capacity of 12.88 MMTPA to support the development of the Golfinho-Atum field located entirely within Offshore Area 1.
The Golfinho-Atum Project will also supply initial volumes of about 100 million cubic feet of natural gas per day for domestic sales for Mozambique's industrial development.
The project is envisaged to be expanded to up to 50 MMTPA in future.
"With the approval of the development plan in February 2018, ongoing resettlement implementation activities, site preparation and execution of these SPAs, the project is poised to take final investment decision (FID) in H1 2019," OVL said.
OVL holds 16 per cent interest in the Mozambique Rovuma Area-1 Offshore Project, out of which 10 per cent stake is held directly by ONGC Videsh and another 6 per cent interest is held through its 60 per cent shareholding in Beas Rovuma Energy Mozambique Ltd (BREML). The remaining 40 per cent shares in BREML are held by Oil India Ltd.
Anadarko Moambique rea 1, Lda is the operator of the project with 26.5 per cent stake and the other partners are Mitsui E&P Mozambique Area1 Ltd (20 per cent), ENH (15 per cent), BPRL (10 per cent) and PTTEP (8.5 per cent).