Rich Contract Pickings for International Companies From Mozambique's Major LNG Project

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Anadarko Petroleum (NYSE:APC) (The Woodland, Texas) and ENI SpA (NYSE:E) (Rome Italy) have signed a Heads of Agreement (HoA) to coordinate the development of their Mozambique gas fields in the construction of a liquefied natural gas (LNG) plant in the Cabo Delgado province in the north of the country. When completed, the plant would be the largest in the world, outside Qatar, with an eventual capacity of about 50 million tons a year.

"Reaching a HoA with Eni is a significant step that preserves the project timeline. We expect the HoA to lead to a utilization agreement to further facilitate the efficient development of the current resources, as well as the independent reservoirs on both blocks, enabling enhanced economies of scale through shared infrastructure and facilities. Our commercial and technical teams have proven the ability to work collaboratively through these discussion, as we work alongside the Mozambican government towards a shared target of first LNG cargoes in 2018," said Anadarko President and CEO, Al Walker.

Anadarko operates Offshore Area 1 and Eni operates Offshore Area 4. The companies have awarded front-end engineering and design (FEED) contracts for offshore LNG construction and offshore installation. Technip SA (OTC:TKPPY), (Paris, France), a venture between Subsea (SUBC) and Saipem SpA (OTC:SAPMY) (Milan, Italy) and McDermott International (NYSE:MDR) together with Allseas USA Incorporated (Houston, Texas) will design the offshore infrastructure.

The four LNG trains, which each have a five million tons-a-year capacity, will have FEED performed by a Chicago Bridge & Iron (NYSE:CBI) (The Woodlands, Texas) in a joint venture between the company and Chiyoda Corporation (Tokyo, Japan). Bechtel Group Incorporated and ventures including JGC Group (Yokohama, Japan) and Fluor Corporation (NYSE: Irving, Texas) will also contribute to the LNG plant's design and development. Mitsui Company & Limited (NASDAQ:MITSY) (Tokyo, Japan), a partner in Anadarko's project reported that the gas supply will be shared evenly between Anadarko and Eni. For related information, see September 10, 2012, article -Gas boom Worth $5.2 Billion a Year to Mozambique by 2026 and April 27, 2012, article - PetroSA Proposes $4 Billion Gas-to-Liquid Plant in Mozambique

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