Italian oil company Eni and its partners in Area 4, offshore Mozambique, sign binding agreement for the sale of LNG produced in Coral South with BP, Eni announced Tuesday.
According to company's press release, the agreement has been already approved by the government of Mozambique and is conditional on the Final Investment Decision (FID) of the whole project which is expected to be concluded by the end of 2016.
In February 2016, Eni announced its approval of the Plan of Development for the Coral discovery, in Area 4 offshore Mozambique which relates to the first phase of development for 5 trillion cubic feet of gas in the discovery.
As per the latest agreement, Eni East Africa S.p.A. and its partners, Galp, Kogas and ENH in the Area 4 Block in Mozambique signed the binding LNG sale agreement with BP Poseidon Ltd., a company entirely controlled by BP Plc.
At the end of September 2016, Mozambique Energy Minister Pedro Couto was relieved of his duty, the Mozambique presidency announced. The dismissal was just one month before Eni was about to finalize an offshore gas project worth tens of billions of dollars.
The latest agreement contains the sale, for a period of over 20 years, of all the volumes of LNG that will be produced from the Coral South Floating LNG facility, which will have a capacity above 3.3 million tons per annum of LNG, the press release said.
The company proclaimed that through this agreement the Area 4 partners "have achieved another fundamental milestone for the execution of the Coral South development project, following the approval in February 2016 of the Plan of Development by the Government of Mozambique."
Eni is the operator of Area 4 with a 50 percent indirect interest, owned through Eni East Africa (EEA). CNPC owns a 20 percent indirect interest also through Eni East Africa. Other shareholders include, Galp Energia, KOGAS and Empresa Nacional de Hidrocarbonetos (ENH) with a 10 percent stake each.
By Muhsin Baris Tiryakioglu