BP began shipping liquefied gas (LNG), from Mozambique’s vast new reserves opening up resources that could ease Europe’s energy crisis.
It was the first export shipment to sail, a landmark for one of Africa’s poorest countries. More than a decade ago, huge offshore deposits were discovered.
The consignment was taken to the Coral Sul offshore plant by Eni in an LNG tanker named British Sponsor, bound for an unknown European destination.
BP has a long-term agreement to purchase 100% of the LNG output from this plant. It has the potential to produce as much as 3.4 million tonnes annually.
Vladimir Putin’s invasion of Ukraine and the resulting disruption to Russian supplies to Europe has sparked a race for gas supplies and renewed interest in Mozambique’s resources.
Energy giants Total and ExxonMobil were attracted to the 2010 discovery of large resources in the Rovuma basin off the coast of northern Mozambique.
However, a violent Islamist insurgency stopped their projects after militants from the Islamic State group took over the area. Coral Sul’s safer offshore location has allowed them to continue setting up.
BP stated that the facility’s production began at a crucial moment because LNG plays a critical role in energy security.
The International Energy Agency warns that Europe’s LNG markets will be facing “unprecedented uncertainty in supply” due to sanctions following Russia’s invasion. It is impossible to rule out a complete shutdown of pipeline flows to Europe.
Claudio Descalzi (Eni’s chief executive) stated that the new supply source could contribute significantly to Europe’s energy security. He also said that the increased diversification of supplies would help in supporting a just transition.
Security and oil sources agree that the situation in northern Mozambique is improving over the last year. However, there are still occasional attacks. Total still needs security guarantees to resume work on its project.
Analysts believed that the British Sponsor indicated it was headed for the Suez Canal.
Alex Froley is an LNG analyst with the market intelligence group ICIS. He stated that it could deliver to Spain, the UK or in December. Or, it might stay in the Mediterranean to receive additional orders.
He continued, “Europe remains the premium market for spot LNG over the winter,” but in the short term, the unusually warm weather in Europe has caused a backlog in tankers offshore waiting to unload. Onshore gas prices are lower than expected due to lower heating demand.
First Cargo Progetto Coral South. Photo Via Eni.com
If anyone reads this article found it useful, helpful? Then please subscribe www.share-talk.com or follow SHARE TALK on our Twitter page for future updates.
Terms of Website Use
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned