A final investment decision, commonly called FID, for a massive offshore natural gas block in Mozambique is expected to be ready by March or April, the chairman of Mozambique’s national oil company ENH said in New Delhi on Feb. 10.
This is the first time any of the seven partners in the block has given a specific timeline regarding an investment plan for the block, located east of Mozambique’s Rovuma basin and called Area 1.
An FID for the block could unlock value in one of the world’s biggest recent gas discoveries, estimated at 75 trillion cubic feet (Tcf).
FID is essentially a stage in funding based on which banks can agree to extend lines of credit for a particular project.
Indian companies—state-owned explorer Oil and Natural Gas Corp. Ltd. through its overseas arm ONGC Videsh Ltd., Oil India Ltd. and Bharat Petroleum Corp. Ltd.—together hold the highest share in the block with a 30% stake.
National oil company of Mozambique Empresa Nacional de Hydrocarbonetos (ENH) holds 15% and Anadarko Mozambique Area, a subsidiary of U.S.-based explorer Anadarko Petroleum, holds 26.5% and is operator of the block.
“One of the Indian companies has already signed a share and purchase agreement for the gas ... The first molecules will come to India by 2024,” ENH chairman Omar Mitha said.
The location of Mozambique is strategic for Indian imports of natural gas and it does not have the geopolitical challenges of the Middle East, Mitha said.
Area 4, an adjoining gas discovery operated by Italian major Eni, will see its FID by July, the chairman added.
The investment decision for the 75 Tcf natural gas reserves involves setting up two LNG plants of 12.88 million tonnes per annum in total.
The career oil and gas man has put his money on U.S. natural gas via Comstock Resources Inc. and the Haynesville Shale.
Oil and gas producer Apache said on April 23 it would delay natural gas production from its Alpine High assets in the Permian Basin due to "extremely" low prices.
Meanwhile, gross natural gas production in the U.S. Lower 48 fell for the first time in a year, sliding in January from a record high the month before, says the EIA.