[Mozambique] Mozambique LNG

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[Mozambique] Mozambique LNG

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Maputo, August 24, 2020 - Total E&P Mozambique Area 1, operator of the Mozambique LNG project, announces that it has signed a new Memorandum of Understanding with the Government of Mozambique regarding the security of Mozambique LNG project activities.

This new Memorandum of Understanding provides that a Joint Task Force shall ensure the security of Mozambique LNG project activities in Afungi site and across the broader area of operations of the project. Mozambique LNG shall provide logistic support to the Joint Task Force. The Government of Mozambique is committed that the Joint Task Force personnel shall act according to the Voluntary Principles on Security and Human Rights (VPSHR).

The memorandum demonstrates the project’s commitment to meeting its milestones in a secure manner, while creating local opportunities and bringing meaningful social and economic benefits for the province of Cabo Delgado and the country.

His Excellency the Minister of Mineral Resources and Energy, Ernesto Max Elias Tonela, said: “We are proud to continue working with the Mozambique LNG project to ensure the country benefits from its presence. This Memorandum of Understanding bolsters security measures and endeavors to create a safe operating environment for partners like Total which enables their ongoing investment in Mozambican industry, for small and medium enterprise and for our communities.”

Ronan Bescond, Country Chair of Total in Mozambique, said: “In recognition of the benefits the Mozambique LNG project will bring to local communities, the country, and all parties involved in the project, Total and the Government of Mozambique are committed to enable steady progress towards a successful delivery of the project. In view of the security situation in the Province of Cabo Delgado, our priority is to ensure the security of our workforce, many of whom residing in neighboring communities, and of the project operations. On behalf of our Area 1 partners, we appreciate the support provided by the Government of Mozambique for the secure delivery of the project.”

Total E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%).
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Re: [Mozambique] Mozambique LNG

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The Mozambique LNG Project started with the discovery of a vast quantity of natural gas off the coast of northern Mozambique in 2010, leading to a $20 billion Final Investment Decision in 2019. Now, through cooperation and responsible project planning, the project is on track to deliver LNG in 2024.

For now, our plans for the approximately 65 trillion cubic feet of recoverable natural gas include a two-train project with the ability to expand up to 43 million tonnes per annum (MTPA).

The Project is operated by Total – the world’s second largest LNG player with a leading presence in Africa – which is uniquely qualified to ensure the Mozambique LNG Project helps to meet the world’s increasing demand for sustainable, reliable and cleaner energy sources.

The Project is committed to collaborating with Mozambican communities and government officials to safely develop these resources in a manner that protects the environment, encourages additional foreign investment, and contributes to the long-term social and economic stability of the country.

The Mozambique LNG Project will deliver a range of social and economic benefits to Mozambique.

Its geographic location positions the project well to meet Atlantic and Asia-Pacific market needs, as well as tap into the growing energy demands of the Middle East and Indian sub-continent.

In the short term, construction of the LNG facilities will provide opportunities for professional training, employment, and contracts for the supply of goods and services. The construction phase also manages environmental and social impacts and reduces risks.

In the medium-to-long term, the Mozambique LNG Project is foundational for diversifying Mozambique’s economic activities. The project will help to:
  • Develop competent construction and operation workforces
  • Develop subject matter experts that support those industries
  • Generate revenue that will contribute to the socio-economic development of the country
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Re: [Mozambique] Mozambique LNG

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Offshore Area 1

To date, approximately 65 Tcf of recoverable natural gas has been discovered in the Offshore Area 1– the equivalent of a 12 billion barrel oil field. The results to date of the drillstem testing (DST) program in the Prosperidade and Golfinho/Atum complexes demonstrate the outstanding flow characteristics of the reservoirs. Each flow test successfully flowed at facility-constrained rates of 90 to 100 million cubic feet per day (MMcf/d), which supports well designs of 100 to 200 MMcf/d.

PROJECT MILESTONES

2010, February
First discovery, Area 1

2014, December
Government passes LNG Decree Law

2015, October
Reserves certified, 12 MTPA

2018, February
Plan of development approved

2019, June
FID $20B committed

2019, August
Construction starts

2019, September
Total becomes Operator

2024
First LNG cargo
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Re: [Mozambique] Mozambique LNG

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WELL COMPLETION

The well is “completed” by lowering a steel pipe, called casing, into the drilled hole and cementing it in place. Next, the pipe is perforated in the targeted zone in order to establish a flow path with the natural gas-bearing rock. A second steel pipe called tubing is lowered in the well that enables the natural gas to flow a distance of 2,500 meters to the seabed.

GATHERING

At the seabed, the natural gas is gathered into subsea manifold systems from multiple wells. From this point, the natural gas enters a pipeline for transportation to the onshore LNG facility. The underwater systems are designed with subsea controls to regulate flow from the wells and provide a safe, reliable means for shutdown.

PROCESSING & LIQUEFACTION

The onshore Mozambique LNG facility will receive, pre-treat and liquefy the natural gas. During pre-treatment, the natural gas will flow through a series of pipes and vessels designed to remove water and hydrocarbon liquids along with any impurities to ensure high-quality natural gas.

After the natural gas is treated and conditioned, the gas stream is routed to a liquefaction ‘train’ where it will undergo multiple stages of refrigeration. Cooling the gas to approximately -160°C, the gas condenses into a clear, colorless and non-toxic liquid. The liquefaction process reduces the volume of the gas by 600 times, making storage and transportation easier.

LNG STORAGE

Once liquefied, the LNG is delivered into large, specially designed, sealed, non-pressurized tanks where it is stored, at -160°C, until it is ready to be shipped. All tanks for the Mozambique LNG project will be of full-containment design based on industry specification standards. Full-containment tanks typically feature a primary liquid containment, open-top inner tank and a pre-stressed concrete outer tank. The primary tank is constructed of 9% nickel steel, which provides excellent strength and toughness at cryogenic temperatures.

The outer concrete tank shell provides primary vapor containment and secondary liquid containment. As a back-up source of containment, the outer tank will contain the liquid and also provide for a safe, controlled release of the vapor, if necessary.

Storage facilities are equipped with advanced safety systems to monitor pressures and provide early detection of potential issues and rapidly activate emergency shutdown if warranted.

LNG SHIPPING AND TRANSPORT

From the storage tanks, LNG will be transported through insulated pipelines to a nearby export jetty where it will be loaded into purpose-built LNG vessels.

LNG ships come in various sizes, shapes and designs. There is no “one size fits all.” Ship size is optimized project-by-project. One of the key features of the specially designed, double-hulled vessels is their insulated containment tanks that maintain the LNG in a liquid state for sea voyages to markets and consumers around the world.

Once the LNG is loaded onto an LNG ship, the vessel maintains the LNG in liquid state for delivery to markets around the world. The LNG ship essentially acts as the “pipeline” for delivery to other markets around the globe.

One-way voyage times from Mozambique to terminals in northern India might take 7 days, whereas a LNG cargo delivery to certain Japanese markets would be approximately 17 days in duration. When the LNG ship reaches its final destination, the LNG is offloaded at the buyer’s re-gasification terminal. The LNG is transferred into storage tanks and then undergoes vaporization, a process that heats the LNG to convert it back into natural gas. The clean-burning natural gas is then delivered to the intended end-users for energy supplies.

PREPARING FOR LNG PRODUCTION

Once a successful well has been drilled and commercial quantities of natural gas have been confirmed through appraisal activities, the development phase can begin. Development generally includes preparing wells for production. Because the natural gas found in Mozambique’s Offshore Area 1 is approximately 40 kilometers offshore and in water depths of approximately 1,600 meters, specially engineered equipment is required to produce, gather, process and transport the natural gas to the onshore facilities for processing.
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Re: [Mozambique] Mozambique LNG

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Total declares Force Majeure on Mozambique LNG project

Paris, 26 April 2021 – Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, Total confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total, as operator of Mozambique LNG project, to declare force majeure.

Total expresses its solidarity with the government and people of Mozambique and wishes that the actions carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stability in Cabo Delgado province in a sustained manner.

Total E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total SE, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%).
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Re: [Mozambique] Mozambique LNG

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Mitsui and its partners made the final investment decision for the Mozambique LNG Project in June 2019. One of the largest natural gas reserves discovered anywhere in the world in recent years, it will be transformational for Mitsui, host country Mozambique, and the global energy system. Generating more energy with less environmental load is the new global energy challenge. The Mozambique LNG Project is Mitsui’s answer.

Mitsui divides its business into seven segments. Energy is a core segment and the numbers show why. In fiscal 2019, Energy accounted for 15 percent of Mitsui’s net income and 36 percent of the company’s operating cash flow, well ahead of any other segment.

Now, as anxiety grows about global warming and air quality, the pressure is on to switch to an energy source able to meet the needs of a global population heading for 8 billion while also being clean enough to keep climate change in check.

Mitsui sees liquefied natural gas (LNG) as the answer to this dual challenge. First, there are ample natural gas reserves around the world; in addition, it produces less pollution (no sulfur dioxide and much less nitrogen oxide) than other fossil fuels.

Developing energy at the frontier

Mitsui has a long history in the natural gas arena. The company went into oil and gas exploration and production (E&P) in 1958 and entered the LNG business in the 1970s. Mitsui’s LNG portfolio now consists of 11 projects in nine countries covering Africa, Asia, Australia, the Middle East, the United States and Russia, and the scale of the company’s business is growing fast.

June 18, 2019 marked a significant milestone in Mitsui’s history. It was on this day that Mitsui and its partners made a final investment decision on the first onshore Mozambique LNG Project in east Africa. However, Mitsui’s involvement in the Mozambique LNG project actually dates back more than a decade to 2008, when it acquired a 20 percent stake from then operator Anadarko Petroleum. (After Occidental Petroleum acquired Anadarko in 2019, Occidental sold its 26.5 percent interest in the project to Total, who is now the operator.)

When Mitsui joined the Mozambique LNG Project, no oil or gas had yet been found, while East Africa itself was an unexplored region for hydrocarbons. Analysis of the geological data convinced Mitsui’s oil and gas team that the area had potential, leading it to join forces with Japan Oil, Gas and Metals National Corporation (JOGMEC), an administrative agency of the Japanese government, to participate in the project and, hopefully, create a business from nothing.

Despite the challenges of operating from scratch in a frontier area, the discoveries came thick and fast. Between 2010 and 2015, five fields were discovered in the block thanks to our exploration efforts. With total reserves of 65 trillion cubic feet—enough gas to cover all Japan’s needs for over 15 years —the Mozambique LNG Project now ranks as one of the largest gas reservoirs found in recent years.

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Tangible and intangible challenges

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After exploration comes commercialization. With an LNG project, commercialization is a four-step process, the first of which involves establishing a robust legal framework. Teaming up with foreign companies on a resource project of the huge scale of the Mozambique LNG Project was a novelty for Mozambique, so new laws needed to be drafted to minimize foreseeable risks and guarantee a level of stability (and ultimately a stable supply of gas) over the decades of development and operation. Mitsui and the Mozambican government worked shoulder to shoulder for several years to achieve this.

The second step consists of preparatory work for the construction and operation of the project. Since Mozambique is a developing country with little domestic demand, the mature-economy option of piping gas direct to market was not feasible. Instead, the gas from the Mozambique LNG Project would need to be cooled, liquefied and exported by ship as LNG. Building a liquefaction plant is an expensive process, with the remoteness of the site (2,000 kilometers from the capital) and a lack of existing infrastructure only adding to the difficulties. Here careful planning and the use of experienced contractors plays a key role.

Step three involves the securing of the long-term LNG marketing contracts to provide all-important visibility and stability to the project. Then it’s time for the fourth and final step in the commercialization process: project finance. The technical requirements and estimated costs of the project are worked out through Front End Engineering Design (FEED). The necessary funds are then raised from official export credit agencies. The Mozambique LNG Project consortium raised over $14 billion in total from financial institutions in eight countries and regions including Japan, the US, the UK, the Netherlands, Italy and South Africa. In project-finance terms, this was a deal at the highest level.

Moving toward production

Completing those four steps took eight years. Thanks to our previous experience with LNG projects, our commitment and our close collaboration with the project partners, Mozambican government and other stakeholders, we managed to work our way through all the challenges that came up.

With the FID completed in June 2019, the construction and engineering phase is now getting under way. Long-lead items, such as the cryogenic heat exchangers—gigantic vertical tubes in which gas is cooled by heat exchange with a refrigerant—are on order. The ground is being cleared at the LNG facility site, an aerodrome and houses built for the construction workers, and the road widened for heavy haul trucks.

The subsea system (18 wells and a 40km pipeline) to extract the gas and bring it ashore from the block’s first field, Golfinho/Atum, should be ready before the completion of the liquefaction facilities. Meanwhile, production is scheduled to start in 2024. The annual capacity of 12 million metric tons will be equal to roughly one-sixth of Japan’s total annual demand.
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