Italian energy giant and LNG player Eni has sanctioned the development of the Coral South FLNG project offshore Mozambique.
During the development launch ceremony, all the drilling, construction and installation contracts for the production facilities were signed, as well as agreements with the Mozambican government for the regulatory framework and financing of the project.
Coral South is the first project in the development of the considerable gas resources discovered by Eni in Area 4 of the Rovuma Basin.
The floating liquefied natural gas (FLNG) unit will have a capacity of around 3.4 million tons per year. It is expected to be East Africa’s first floating LNG production project.
The FLNG facilities construction will be financed through project finance covering around 60 percent of its entire cost.
The Coral field, discovered in May 2012, is located within Area 4 and contains approximately 450 billion cubic meters (16 TCF) of gas in place.
In October 2016, Eni and its Area 4 partners signed an agreement with BP for the sale of the entire volumes of LNG produced by the Coral South project for a period of over twenty years.
Eni is the operator of Area 4, through its participation in Eni East Africa (EEA), which holds a 70 percent participating interest in the concession while Portugal’s Galp Energia, South Korea’s Kogas and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), each hold 10 percent stake.
Eni holds 71.4 percent shares of Eni East Africa with China’s CNPC holding 28.6 percent, however, in March 2017 Eni signed an agreement to sell 50 percent of its shares in EEA to ExxonMobil.