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Anadarko gears up on Mozambique LNG

Mozambique to join Qatar and Australia LNG exporters

Anadarko Petroleum Corporation (Anadarko) and its partners Mitsui E&P, BPRL Ventures Mozambiques, Videocon Mozambique, PTTEP after acquiring Cove Energy, and Emprecia Nacional de Hidrocarbonetos (ENH), may propel Mozambique among the largest LNG exporting countries with Qatar and Australia with their Mozambique LNG project.

With estimated $15 billion capital expenditure, Anadarko LNG project may change Mozambique status in a couple of years.

Anadarko and its partners signed their first Exploration and Production Concession Contract (EPCC) with Mozambique Government in 2006.

According to this contract Anadarko would explore the Area 1 of the Rovuma basin in northern Strait of Mozambique.

In 2010, the Barquentine discovery was revealing 5 trillion cubic feet (tcf) of natural gas recoverable reserves.

Since then, the appraisal campaign implementd by Anadarko in the Area 1 of the Rovuma basin went through ballooning discoveries with Lagosta, Camarao, Bargentine-3 and Lagosta-3 wells.

In the zone called Properidade of about 260 square kilometers, Anadarko identified 17 to 30 tcf recoverable reserves out of 30 to 50 tcf of reserves in place of natural gas.

In 2012, Anadarko repeated the exercise in the Golfinho and Atum complexes which at the end of the appraisal campaign appeared to be same and to hold 10 to 30 tcf of recoverable reserves from 18 to 55 tcf natural gas reserves in place.

In a couple of years of exploration Anadarko and its partners Mitsui, BPRL Ventures, Videocon, PTTEP and ENH came to head 100 tcf of natural gas reserves.

Considering this outstanding success, Anadarko and its partners decided to initiate a preliminary front end engineering and design (pre-FEED) for the construction of two LNG Trains of 5 million t/y each.

Anadarko awarded pre-FEED to KBR and Technip

In August  2011, Anadarko and its patners,  Mitsui, BPRL Ventures, Videocon, PTTEP and ENH awarded a preliminary front end engineering and design (pre-FEED) contract to KBR and Technip.

According to this preliminary front end engineering and design (pre-FEED) contract, KBR and Technip are developing the conceptual study around:

 – Offshore Floating Production Unit

 – Subsea production wells

 – Subsea pipelines to the shore

 – Two LNG Trains of 5 million t/y each

 – LNG storage tanks farm

 – Condensate storage tanks farm

 – LNG Export terminal

The offshore production system is designed in a flexible way to allow the tie-back of the natural gas production wells in a ray of 56 kilometers (35 miles).

With this flexible design Anadarko will be able to add new production wells at any time during the development phase to sustain the targeted plateau production during 30 years of production.

KBR and Technip are working on this preliminary front end engineering and design (pre-FEED) in consortium from KBR Houston office, in Texas, USA.

Anadarko to award EPC on competitive FEED

In respect with the size of the discoveries, Anadarko and its partners Mitsui, BPRL Ventures, Videocon, PTTEP and ENH, are willing to proceed on fast track, meaning that:

 – LNG Trains should be converted into competitive FEED contract in 2012

 – Final investment decision (FID) should be made in 2013

 – Engineering, procurement and construction (EPC) should be awarded by conversion to the winner of the competitive FEED.

 – Construction work is expected to begin in 2014.

 – First LNG shipments are scheduled in 2018.

In parallel the Italian oil company Eni made similar discoveries in the Area 4 of the Rovuma basin

To develop its own LNG project would take Eni two years more than the on going Anadarko Mozambique LNG project.

So both companies are in discussion to team up in Mozambique LNG project.

For Anadarko it would reduce the capital expenditure and facilitate the decision for the future expansions of the Mozambique LNG project while Eni would benefit from a short cut from exploration to commercial operation in a project to become its first priority on upstream.

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