Financing for the Rovuma Area 1 natural gas exploration project in northern Mozambique has been launched at the level of international commercial banks, the Minister of Mineral Resources and Energy announced on Wednesday.
“I was pleased to learn that the financing of the project was launched in the commercial banking market, a milestone that represents the maturity of the venture,” Max Tonela said during a meeting in Maputo with export credit agencies – designated in the market by the acronym, ECAs – Export Credit Agencies.
These are the credit institutions that will support the S$12 billion financing for the first two liquefaction lines to be installed on the Afungi Peninsula in the province of Cabo Delgado.
The consortium led by US oil company Anadarko will produce 12 million tons of liquid natural gas per year.
“As far as I know, each one of you will now begin the approval process by the respective administrations to provide their respective instalments of funding. That’s great news,” the minister told financial institutions.
At a meeting in Maputo, Max Tonela and the Minister of Economy and Finance, Adriano Maleiane, reiterated the government’s “strong commitment” to the Area 1 project.
Minister Maleiane announced that the Mozambican executive had approved a plan to support the project.
“A project support plan was signed last week,” he said, with three goals aimed at speeding up the process.
The first objective provides for “government support for the timely implementation” of the enterprise, followed by “adoption and implementation of necessary measures to renew and approve permits, work permits and visas in time, as well as to import and export goods and services efficiently”.
The plan also promises “the speedy resolution of any issues or disputes that may arise”.
Construction work on the Afungi peninsula in Cabo Delgado is already achieving “formidable” progress, albeit pending the final investment decision for the LNG plant, expected in the first half of next year.
Area 1 has already guaranteed the sale of 9.5 million tons of gas per year “and, thanks to each one of you, a mega-financing is about to be implemented”, Max Tonela told the assembled ECAs.
Reiterating the government’s commitment to the project, the minister also noted the “firm commitments of the President of the Republic, Filipe Nyusi, to strengthen and consolidate the political stability that Mozambique has won over the last 25 years”.
The consortium that operates Area 1 consists of North American Anadarko (26.5%), Japan’s Mitsui (20%), Indian ONGC (16%) and the Mozambican state oil company ENH (15%).
Smaller shares are held by two other Indian companies, Oil India Limited (4%) and Bharat Petro Resources (10%), and by Thailand’s PTTEP (8.5%).