India State-run ONGC, OIL and BPCL will invest $6 billion in the next four years to develope a giant gas field off the Mozambique coast and converting the fuel into LNG for export to nations such as India, country oil minister Dharmendra Pradhan said recently as quoted by the local press.
ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and a unit of Bharat Petroleum Corp Ltd (BPCL) together hold 30% interest in Rovuma Area-1, which is estimated to hold recoverable gas reserves of up to 75 trillion cubic feet.
“We have invested more than $6 billion so far (in the Mozambique field) and another $6 billion will be invested by 2019 to develop Rovuma Area-1 field,” he said.
An estimated $18.4 billion will be required to bring first set of discoveries in Rovuma Area-1 on to production and to convert that gas into liquid (liquefied natural gas or LNG) for ease of shipping to consuming nations such as India. OVL’s share would be $2.944 billion.
Pradhan, who has just returned from a two-day visit to Mozambique, said the first LNG from the block is targeted for 2018-end or early 2019. The project with capacity to produce 20 million tonnes of LNG annually would be the world’s largest LNG export site after ExxonMobil-run Ras Laffan in Qatar. OVL had in 2013 bought Videocon’s 10% stake in the Rovuma Area-1 for $2.475 billion. It followed this up by acquiring another 10% stake in the same field from Anadarko Petroleum Corp of the US for $2.64 billion. The 10% stake of Videocon was split in 60:40 ratio with OIL.
“I had a very successful tour to Mozambique… we are getting full cooperation from the Mozambique government for early development and monetisation of Rouvma Area 1,” he said.
Pradhan said the block consortium is talking to Indian buyers such as state gas utility GAIL for selling LNG. “If it fetches more money (to us) by selling the LNG then and there itself, we will opt for that. But if it is beneficial to bring the gas to India, we will certainly look at that option,” he said.
Rovuma Area-1 Offshore Mozambique Block (Block Area 1) is located along the coasts of northern Mozambique and southern Tanzania in the Indian Ocean. It has a total area of more than 10,000 sq kms in water depths ranging 900 metres to 1,600 metres and about 30-60 kms from shore. Woodlands, Texas-based energy-exploration company Anadarko is the operator of the block with 26.5% stake while a unit of BPCL has 10% interest. Other partners in Area 1 include Mitsui with 20% stake, ENH (15%) and PTTEP (8.5%).