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October 30, 2018updated 08 Jul 2020 11:52am

India’s BPCL to invest $800m in Mozambique LNG project

Indian oil and gas firm Bharat Petroleum (BPCL) is reportedly set to invest $800m as equity in the Mozambique Rovuma Offshore Area 1 liquefied natural gas (LNG) project.

Indian oil and gas firm Bharat Petroleum (BPCL) is reportedly set to invest $800m as equity in the Mozambique Rovuma Offshore Area 1 liquefied natural gas (LNG) project.

The investment represents BPCL’s largest investment in an upstream project overseas, thehindubusinessline.com reported.

The company holds a 10% interest in the Rovuma Offshore Area 1 concession, which is located within the Rovuma Basin. BPCL acquired the 10% stake for $703m.

Anadarko Petroleum is the field operator with an ownership of 26.5%. Other participants in the project include Mitsui E&P Mozambique Area 1 (20%), Empresa Nacional de Hidrocarbonetos (ENH) (15%), ONGC Videsh (OVL) (10%), BEAS Rovuma Energy Mozambique (BREML) (10%), and PTTEP Mozambique Area 1 (PTTEP MZA1).

The partners expect to make a final investment decision (FID) during the first half of next year.

“We are hoping that the FID will happen sometime next year in the first half or second half.”

Approximately 75 trillion cubic feet of natural gas has already been discovered in the project area, which comprises the Prosperidade and Golfinho/Atum complexes, as well as onshore LNG infrastructure in the Cabo Delgado province in northern Mozambique.

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The consortium partners are developing an initial onshore LNG project comprising two LNG trains with an aggregate nameplate capacity of 12.88 million tonnes per annum (Mtpa).

An unnamed BPCL executive told the publication: “Assuming that the project cost is going to be somewhere around $20bn, we are anticipating that 33%-37% will be equity and the balance would be debt.

“Once that is finalised, we are good to reach the FID stage. We are hoping that the FID will happen sometime next year in the first half or second half.”

To make the FID, the partners need to achieve certain milestones, including signing long-term LNG sale and purchase agreements (SPA) for at least 9Mtpa.

Earlier this month, Japan’s Tohoku Electric reached an agreement to purchase up to 0.28Mtpa of LNG from the project.

Construction of the project is anticipated to begin by the end of next year, while the first LNG is expected by 2023.

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