Italian energy company Eni signed an $8-billion deal on Thursday to develop a gasfield off the coast of Mozambique, the first of a series of projects that could transform the poor African nation into a major energy supplier to Asia.
Developing the Coral South field, discovered in May 2012 and operated by Eni, requires building six subsea wells connected to a floating facility capable of producing about 3.4-million tonnes of liquefied natural gas (LNG) per year, Eni said.
The project would cost $8-billion and LNG exports were expected to start in 2022.
“The Coral South Project will deliver a reliable source of energy while contributing to Mozambique’s economic development,” Eni chief executive Claudio Descalzi said in a statement.
The Coral South field contains about 450-billion cubic metres, or 16-trillion cubic feet (tcf) of gas. The field lies in the Rovuma Basin, with estimated reserves of about 85 tcf, enough to supply Germany, Britain, France and Italy for nearly two decades.
Mozambican authorities approved the project’s development plan in February 2016 and in October Eni signed a 20-year deal to supply BP with LNG from the project.
Mozambique, which lies on Africa’s eastern seaboard, is well placed to supply growing Asian economies with gas, analysts say.
The floating LNG platform will be built in South Korea by a consortium led by Samsung Heavy. The group includes France’s Technip and Japan’s JGC.
Partners in the field development include China National Petroleum Co (CNPC), Korea Gas Corp (Kogas) and Mozambique’s state-run Empresa Nacional de Hidrocarbonetos (ENH).
US energy major Exxon Mobil Corp agreed this year to pay Eni $2.8-billion for a 25% stake in its huge Area 4 concession off the coast of Mozambique, which includes the Coral South field.
US firm Anadarko is planning a separate onshore LNG project in northern Mozambique.
Eni’s final investment decision will be a relief for the Mozambican government following a high-profile debt scandal that emerged last year.
LNG exports are seen as the only likely long-term solution to the country’s deep financial problems.
