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Construction of first onshore LNG project in Mozambique to commence

Construction works of Anadarko-led Area 1 Mozambique LNG project, the first onshore LNG in the country is set to commence. This is after Anadarko Petroleum Corporation, the co-ventures of the project announced a Final Investment Decision (FID) on the development.

The official declaration of FID was made at a sanctioning event in Maputo, Mozambique, attended by His Excellency the President of the Republic of Mozambique Filipe Nyusi, the Minister of Mineral Resources Ernesto Max Tonela, and Anadarko’s Chairman and CEO Al Walker, along with representatives from the Area 1 co-venturers and distinguished guests.

“This official declaration of FID confirms the Area 1 Plan of Development is now effective, with notice provided to the Government of Mozambique that all conditions precedent have been fulfilled, and the project can now advance to the construction phase,” said President Filipe Nyusi. 

The project is a joint venture between Italian engineering, procurement, and construction (EPC) contracting giant Saipem, in a joint venture with America’s McDermott International and Japan-headquartered Chiyoda Corporation, and Area 1 Concessionaires – a wholly owned subsidiary of Anadarko Petroleum Corporation for the development 

The project scope include construction, procurement and engineering for all components of the onshore LNG development, this include two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum (MTPA) plus associated infrastructure and utilities.

“LNG is shaping an entirely new era of energy solutions and McDermott is playing a crucial role in this global shift. The project will be built based on McDermott’s industry-leading experience and ability to deliver EPC solutions globally,” said McDermott’s Senior Vice President for Europe, Africa, Russia and Caspian Mr Tareq Kawash.

Earlier the JV provided front-end engineering design (FEED) services for the LNG development. McDermott’s initial portion of the EPC contract award is about US $2bn. Saipem and McDermott have established a new office in Milan, Italy to lead in Engineering, procurement and project management. This will aid in sharing on-site construction management responsibilities, the new plan will also see McDermott perform engineering from both India, Gurgaon and London. On the other side Chiyoda will provide advisory services for the JV. In addition as the operator of Offshore Area 1, Anadarko is the main project sponsor while other sponsors include Beas Rovuma Energy Mozambique Limited, ENH Rovuma Área Um, BPRL Ventures Mozambique B.V., S.A, PTTEP Mozambique Area 1 Limited, ONGC Videsh Ltd and Mitsui E&P Mozambique Area 1 Ltd.

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