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Anardarko and Eni to team up in Mozambique LNG

Anadarko and Eni to create 10 Trains Afungi LNG Park

The Houston based Anadarko Petroleum Corporation (Anadarko) and the Italian national oil company Eni signed  Heads of Agreement (HOA) to coordinate the development of their respective natural gas fields in the prolific Rovuma Basin, offshore Mozambique.

Anadarko is leading a joint venture to develop the Mozambique offshore Area 1, while Eni owns the contract to explore and produce in the Area 4.

Since 2011, Anadarko accumulated discoveries in the Rovuma Basin Area 1 which appeared to be interconnected together so that Anadarko and its partners are heading two major natural gas complexes:

 – Prosperidade estimated to contain more than 30 trillion cubic feet (tcf) of natural gas recoverable reserves

 – Golfinho/Atum to hold 15 to 35 tcf of natural gas recoverable reserves

The joint venture in charge of the Area 1 block is made of:

 Anadarko 36.5% is the operator

 – Mitsui E&P 20%

 – BPRL Ventures Mozambique B.V. 10%

 – Videocon Mozambique Rovuma 1 10%

 – PTTEP 8.5% after taking over Cove Energy in 2012

 – Empresa Nacional de Hidrocarbonetos (ENH) 15%

With 20 more prospects such as the third discovery, Tubarao, to be appraised on first quarter 2013, Anadarko and its partners estimate the recoverable reserves of its Rovuma Basin Area 1 to reach 100 tcf of natural gas.

On the Area 4, Eni is also working in joint venture where they share working interests:

 – Eni 70% is the operator

 – Galp Energia 10%

 – Kogas 10%

 – ENH 10%

Since October 2011, Eni and its partners performed series of successful exploratory wells with Namba South 1, Namba North 1 Coral 1, Namba North East 1 and Namba North East 2.

From this cascade of discoveries, Eni estimated the reserves in place in it allocated Rovuma Basin Area 4 to exceed 70 tcf of natural gas.

The promptness and size of the discoveries led Eni and its partners to make quick decisions to develop their Area 4 in the race with Australia to supply the profitable Asian markets.

Since Anadarko had already started the feasibility study a year ahead Eni for their Area 1 block, Eni saw here the opportunity to save one year and money in redundant studies.

In this context, Anadarko and Eni agreed through their Heads of Agreement to:

 – Coordinate their respective development of the offshore part of their project

 – Jointly build the onshore liquefaction natural gas (LNG) facilities

These giant onshore LNG facilities of the Mozambique LNG project will comprised 10 LNG trains be planned and constructed in phases in the Afungi LNG Park in the Cabo Delgado Province, northern Mozambique.

Anadarko signed onshore and offshore FEED contracts

Anadarko selected a team of Technip, a Subsea-7 and Saipem joint venture in consortium with a McDermott-Allseas joint venture for the front end engineering and design (FEED) of the offshore installation.

This FEED contract for the offshore part of the Mozambique LNG project also includes the engineering, procurement, installation and commissioning of the subsea production systems of the Rovuma Basin Area 1.

Regarding the onshore part of the Mozambique LNG project, Anadarko and Eni are planning up to five phases of development in the Afungi LNG Park.

KBR and Technip completed the pre-front-end-engineering and design (pre-FEED) study for the onshore LNG trains.

From the conceptual study, each phase should have two LNG trains of 5 million t/y each so that Mozambique LNG would reach 50 million t/y capacity of LNG at full field development.

Anadarko and Eni have organized competitive FEED between three consortia

 – JGC with Fluor Transworld Services

 – CB&I with Chiyoda

 – Bechtel

In conclusion to theirFEED work, the three consortia in competition shall submit a lump sum turn key offer for the engineering, procurement and construction (EPC) contract of the first phase to include two LNG trains.

The consortia will also propose the plan for the overall development of the Afungi LNG Park based on ten LNG trains in total.

In using conventional solutions with platforms to be located approximately 56 kilometers offshore and onshore LNG train, Anadarko estimates the development of the Rovuma basin area 1 to $15 billion capital expenditure.

Anadarko and Eni are now working in close collaboration with Mozambique Government, they expect that this unitization of the infrastructures and facilities will help to save time and costs on the Mozambique LNG project in order to ship the first LNG cargoes in 2018.

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