India and Mozambique agreed on Wednesday to expedite development of the giant Rovuma gas field, which will be converted into liquified natural gas (LNG) for exports.
Oil Minister Dharmendra Pradhan, who is here to attend the LNG Producer-Consumer Conference, met his Mozambique counterpart Leticia Klemens to discuss the development of the gas field. “Met Energy Minister of Mozambique; agreed to expedite our project of gas development where Indian companies have invested about USD 6.5 billion,” Pradhan tweeted.
Met Energy Minister of Mozambique;agreed to expedite our project of gas development where Indian companies have invested about US$6.5 bln pic.twitter.com/CiBXmlEogh
— Dharmendra Pradhan (@dpradhanbjp) October 18, 2017
ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), holds 16 per cent stake in Mozambique offshore block Rovuma Area 1. Oil India Ltd has 4 per cent stake, while a unit of Bharat Petroleum Corp Ltd (BPCL) holds 10 per cent.
The Area 1 is spread across 10,000 square kilometers and is located in northernmost part of offshore Mozambique Rovuma Basin. According to OVL, the second and final exploration phase for Area 1 ended on January 31, 2015 and have resulted in five discoveries, with combined recoverable resource of about 60 trillion cubic feet.
Area 1 represents one of the largest natural gas discoveries in offshore East Africa and has the potential to become one of the world’s largest LNG producing hubs. Area 1 plans to initially develop two LNG trains of capacity 6 million tonnes per annum each. “Area 1 is working towards taking final investment decision (FID) as quickly as possible,” OVL said. “Area 1 has also incorporated Mozambique LNG1 Company Pte Ltd in Singapore to oversee marketing and shipping activities of LNG from first two trains of Golfinho-Atum field,” it said.
The partners are negotiating with buyers for conversion of existing non-binding Heads of Agreements (HOAs) to Sales Purchase Agreements (SPAs). Area 1 plans to raise $12-15 billion through project finance.