India's BPCL Invests $400 Million in Anadarko-Led Mozambique LNG Project

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--India's third-largest oil-refining company, the state-controlled Bharat Petroleum Corporation Limited (BSE:BPCL.BO) (BPCL) (Mumbai, India), plans to invest $400 million in a new, $4 billion liquefied natural gas (LNG) terminal on the Indian Ocean coast of Mozambique.

The project is led by Anadarko Petroleum (NYSE:APC), which holds blocks in the Windjammer/Barquentine gas discovery area and has a 36.5% stake in the project. Mitsui E&P Mozambique (NASDAQ:MITSY), (Tokyo, Japan) holds 20%, and BPCL and Videocon Hydrocarbon Holdings (Aurangabad, India) each hold a 10% stake. Mozambique's state-owned company Empressa Nacional de Hidrocarbonetos EP (ENH) (Maputo) has 15% and Cove 8.5%. Anadarko won the rights to explore in the Rovuma Basin in Mozambique's second licensing round in 2006. BPCL and Videocon each hold 10% stakes in six blocks in the deep water Rovuma Basin.

The first appraisal well was Barquentine 2 in the Windjammer, Barquentine and Lagosta complex, which is estimated to hold a minimum of 6 trillion cubic feet of natural gas resources. The announced earlier in 2011 that is had made four major discoveries out of six blocks, of which two ranked among the top 10 global discoveries of the year.

Pre-FEED (front-end engineering and design) contracts have been awarded by the consortium to KBR (NYSE:KBR) (Houston, Texas) and Technip S.A. (OTC:TKPPY) (Paris, France) for the LNG-processing terminal project. LNG sales contracts are being developed as appraisal work continues. Environmental impact studies and the establishment of financial, commercial and legal framework for the project are ongoing.

A three-dimensional seismic survey of more than 4,448 square kilometers in the north and south of the Rovuma offshore block has been completed, and further appraisal wells and exploration will continue over a period of two years. A drill vessel rig is now on station. Coastal land sites have been identified for the LNG facilities. The final investment decision will be made in 2013.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.