Orginaly driven by Eni and Anadarko, the intend was to call for tender on the base of a competitive FEED in order to save time on the engineering, procurement and construction (EPC) phase of the project with already the target to ship first LNG to Asia in 2018. Now the project is driven primarely by ExxonMobil.
ExxonMobil Eni Mozambique Area 4 Mamba Rovuma LNG Trains 1&2 History
In the same way as they are studying a floating liquefied natural gas (FLNG) solution to speed up the development of the offshore part in Mamba , they are now considering to build their own LNG plant in Quionga, close to Tanzania boarder.
In respect with the reserves in places in the Rovuma basin, Mozambique holds enough gas to feed the Afungi LNG Park, Mamba FLNG and an additional Quionga LNG plant, that would secure first LNG shipment for Eni and PetroChina from Mozambique LNG by 2018.
Anyway these offers arrive in a complex context whereas Eni is in discussion with ExxonMobil to farm-out part or all its shares from the Area 4 and the Mamba LNG project.
August 2016
Eni and ExxonMobil signed an agreement by which Eni will sell 25% stake into the onshore LNG project and transfer the operator role to the US major ExxonMobil.
Eni will keep the operator role for the development of its offshore fields. This agreement follows the acquisition by ExxonMobil of three offshore concessions in the south of the Area 4 operated by Eni.
With this agreement ExxonMobil will have the hand on the largest onshore facilities in Mozambique to export LNG to be supplied by the largest resources discovered in East coast of Africa. In this new context, it is likely that this onshore LNG project will be redesigned in order to meet ExxonMobil requirements and accept further expansions.
March 2017
Eni and ExxonMobil are completing the farm-out agreement by which ExxonMobil would take 25% of Eni stake in its gas-rich Area 4 asset off Mozambique to within the coming weeks. Eni should keep the operator ship role of the offshore part while ExxonMobil would operate the onshore facilities that he should use for its other Mozambique licenses.
December 2017
ExxonMobil is still leading the costs reduction program of the project. The final investment decision (FID) will depend on the balance between the cost reduction and the global demand revitalization on LNG as a consequence of Qatar ban. If the demand accelareates, the FID could be made in 2019 instead of 2020.
July 2018
ExxonMobil and its partners Eni, CNPC, ENH and Galp submitted officially their plan for the development of Mozambique LNG phase-1 project. At this occasion the Mozambique LNG, also called Mamba LNG, project has been renamed Rovuma LNG project.
ExxonMobil will still operate the onshore part of the project while Eni will keep the leading role in offshore operations. In the onshore part the two LNG trains will have a capacity of 7.6 million tonnes per year (t/y) each giving a total capacity of 15 million t/y for the phase-1.
In total ExxonMobil and Eni are expecting to ramp up the production capacity to 40 million t/y.
In submitting this development plan now, ExxonMobil, Eni and their partners are expecting to make the final investment decision (FID) on Rovuma LNG phase-1 in 2019 with first shipment to begin on 2024.
August 2018
ExxonMobil and its partners are reviewing the technical offers submitted by the competitors in conclusion of their respective competitive FEED.
Two groups of bidders remain in competition:
- JGC with Fluor
- Chiyoda with CB&I and Saipem (CCS)
After this technical review the competitors will submit their commercial offer so that the final investment decision (FID) could be made for the sanction of the engineering, procurement and construction (EPC) contract on second half-2019.
January 2019
ExxonMobil and Eni are securing more gas commercial contract, paving the way for a final investment decision (FID) that could come on mid 2019. The two groups of engineering companies engaged in the competitive FEED submitted their commercial offer to ExxonMobil and its partners.
These groups are:
- JGC with Fluor
- Chiyoda with CB&I and Saipem
Chiyoda financial difficulties don’t seem to interfere on the tender submission and the ambition for the team to go ahead. Regarding the subsea package, the competition is running between:
- McDermott with Allseas
- Saipem with Subsea7
May 2019
ExxonMobil and its partners received the formal approval for the project. The final investment decision (FID) is now expected on Q3 2019. ExxonMobil received commercial offers for the EPC contract from the teams in competition on the FEED higher than expected. Therefore, ExxonMobil asked the contenders to review their prices and make proposals to reduce costs.
The process to reduce costs and align on the budget is of course well perceived by the investors, but it may delay the final investment decision (FID) to early 2020.
In parallel, Saipem and Subsea 7 are reported to lead the $2 billion subsea package.
February 2020
The difficulty of the national oil company (NOC) ENH to setup the financing of its stake in the project may cause some delay in the project FID from first half 2020 to second half 2020. The project completion is also delayed from 2024 to 2025.
The financial structure of the project remains the main source of concern of the project with ExxonMobil making the decision to pull its application for $2 billion loan out of the US Export-Import Bank (Exim).
This decision results from still ongoing US sanctions against China forbidding Exim to finance investments where Chinese interests are involved.
Since CNPC is a stake holder of the Rovuma LNG project, ExxonMobil is at the merci of the White House to see its $2 billion loan rejected when called.
Anyway, the economics of the project remains solid and is attracting other financial organizations, especially from Asia, to replace Exim in the project financing.
As part of this $25 billion capital expenditure project, this $2 billion loan is significant but not of the nature to impact on the FID still planned on 2020.
May 2020
ExxonMobil is willing to reduce the costs of the project while it is still looking for $2 billion financing in replacement of the Exim bank.
Among the explored ways, ExxonMobil has opened discussions with Total to share some infrastructures such as storage facilities with Mozambique LNG project.
In such a scenario, ExxonMobil would like, in addition to become the operators of all the LNG Trains for both projects Rovuma LNG and Mozambique LNG.
This option supposes ExxonMobil to make its final investment decision (FID) not too late after Total which is already proceeding even if Covid is freezing construction for now.
Therefore ExxonMobil may delay Rovuma LNG FID to first half of 2021.
October 2020
The JFT consortium made of comprising Japan’s JGC, Fluor of the US and UK-based TechnipFMC will submit a revised commercial offer on Q4 2020, in expecting a FID on Q1 2021.
March 2021
After Qatar decision to proceed with its giant North Field Expansion (NFE) project where ExxonMobil is having interests, the major doesn’t see anymore urgency to make FID on Rovuma LNG project.
Therefore, ExxonMobil and its partners will monitor how the global demand for LNG is evolving strongly enough on coming years to absorb the a new additional production capacity at the scale of Rovuma LNG.
In practice, ExxonMobil and its partner may come back on Rovuma LNG project in 2023 or 2024.
October 2021
ExxonMobil new board is reviewing the company projects portfolio to evaluate costs and carbon emissions as these environmental factor must be know taken in account in the project total cost and return on investment (ROI).
Designed as it is, this project should become the largest CO2 emissions contributor of the company and should deteriorate the company carbon foot print.
Therefore, in this stage, the project is not acceptable and is requiring to review it with a decarbonated design.
This means to use electrical drives for the main compressors and to capture the carbon emissions at the power generation level with still opened questions regarding its usage or storage.
This redesign work will increase the project cost and should take one year, so that any final investment decision (FID) may only come in 2023.
Anyway, the good news is the booming global demand for gas that could help to make this FID.
December 2022
In a context of insecurity in Mozambique, ExxonMobil took the decision to delay its onshore LNG trains.
In parallel, ExxonMobil seems to take the lead on the FLNG-2 project to become operator.
With this move, ExxonMobil should be able to produce LNG on its schedule and Eni will limit the risk to operate a second FLNG in the Area 4.
This project should be delayed for two years.
March 2023
ExxonMobil estimated that the insecurity situation stabilized.
ExxonMobil is now tendering the EPC work, for which bidders expected are:
- JFT consortium made from JGC, Fluor, and TechnipFMC
- McDermott
- Saipem
The JFT joint venture is considered leading the negotiation as it was winning the FEED work in 2019. As Saipem is busy with the TotalEnergies project in Mozambique, it might be considered an outsider. The $24 billion project should be developed as a modular approach of 1.5 million t/y of LNG capacity in each module, for a total capacity of up to 15.6 million t/y of LNG.
May 2024
Abu Dhabi National Oil Company (Adnoc) acquired Galp Energia’s 10% stake in the project for $1.15 billion.
August 2024
ExxonMobil decided to delay the FID until 2026.
September 2024
ExxonMobil and its partners launched the competitive FEED with:
- Technip Energies and JGC
- Saipem with China Petroleum Engineering & Construction Company (CPECC) and McDermott
FEED work should take at least 16 months. The project design is moving forward according to plan. ExxonMobil and its partners are expecting to make the final investment decision (FID) in 2026. As reminder, the project is still being developed as modular approach, including twelve modules of 1.5 million t/y each.
February 2026
ExxonMobil should be ready to take FID by the end of 2026, but construction should not begin before the end of 2027.
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