Millennium Post

ONGC speeds work on LNG terminal at Mozambique

ONGC speeds work on LNG terminal at Mozambique
In a step towards <g data-gr-id="26">start</g> of gas production from its giant Mozambique gas fields, state-owned ONGC and its partners have awarded <g data-gr-id="27">contract</g> for development of an onshore LNG terminal. About 75 trillion cubic feet of natural gas reserves found in offshore Rovuma Area-1, where Indian firms led by ONGC Videsh Ltd hold a total of 30 per cent stake, are to be converted into LNG for transportation by ships to consuming nations like India.

US firm Anadarko Petroleum Corp, the operator of the block, in a statement announced the selection of a consortium consisting of CB&I, Chiyoda Corporation and Saipem (CCS JV) for the initial development of the onshore LNG park in Mozambique. “Selecting CCS JV for the development of the onshore Mozambique LNG park is a significant step toward reaching FID (Final Investment Decision) and demonstrates our continued commitment to advancing this important project toward first cargoes,” said Anadarko Chairman, President and CEO, Al Walker.

The onshore LNG park includes two LNG trains, each with <g data-gr-id="31">capacity</g> of 6 million tons per annum, which is an increase of 1 million tons per train over the original plan. “I am incredibly proud of our co-venture for all of the accomplishments achieved to date, including securing more than 8 million tonnes per annum in non-binding long-term off-take agreements, which are now progressing toward binding SPAs (Sales and Purchase Agreements),” he said. The LNG park will include two storage tanks, each with <g data-gr-id="29">capacity</g> of 180,000 cubic meters, condensate storage, multi-berth marine jetty and associated utilities and infrastructure.

An estimated $18.4 billion will be required to bring first set of discoveries in Rovuma Area-1 on to production and convert that gas into liquid (liquefied natural gas or LNG) for ease of shipping to consuming nations like India. OVL had in 2013 bought Videocon’s 10 <g data-gr-id="35">per cent</g> stake in the Rovuma Area-1 for $2.475 billion. It followed this up by acquiring another 10 per cent stake in the same field from Anadarko Petroleum Corp of the US for $2.64 billion. The 10 per cent stake of Videocon was split in 60:40 ratio with Oil India Ltd (OIL). 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 square kilometres in water depths ranging 900 metres to 1,600 metres and about 30-60 km from shore.

Woodlands, Texas-based <g data-gr-id="21">energy-exploration</g> company Anadarko is the operator of the block with 26.5 per cent stake while a unit of BPCL has 10 per cent interest. 

Cairn seeks Rajasthan block pricing formula revision
Cairn India has demanded a change in the pricing formula for crude oil from its prolific Rajasthan block saying the current pricing mechanism does not capture the full value of oil. Rajasthan crude oil, mostly used by private refiners like Reliance Industries and Essar Oil, is currently sold at a discount to <g data-gr-id="73">prevailing</g> price of benchmark Brent crude oil. Government’s share of taxes and royalty is linked to the price of crude oil.

Sources said the company last month wrote to the Oil Ministry saying the price currently being realised was around 8-10 per cent lower than the benchmark Dated Brent price. This current sub-optimal realisation in pricing of Barmer crude is impacting the value for all stakeholders, it said. That is resulting in potential yearly revenue loss for the government due to lower realisation. There is an immediate need to review the pricing formula, it wrote. 

Stating that the unique nature of the Barmer crude makes it difficult to optimise it in Indian refineries, Cairn wrote that in September 2009 Government had designated PSU refineries to purchase the Rajasthan crude, a sweet low sulphur crude, at a provisional pricing formula till it is examined and approved by the government. The discount was provided as an initial incentive. But the same formula has continued since then. 

Sources said Rajasthan crude oil is being priced using the indigenous crude oil pricing formula linked to Bonney light of west African origin and quality adjustment based. The current price formula doesn’t capture the value provided by <g data-gr-id="66">high quality</g> secondary conversion unit feed, Cairn said. 

PTI

PTI

Our contributor helps bringing the latest updates to you


Share it
Top