ONGC to invest $3 bn more in Mozambique gas field
New Delhi: After spending USD 4.12 billion in acquiring stake in a giant gas field in Mozambique, ONGC will invest another USD 3 billion as its share of cost of producing gas from the field and converting it into LNG.
ONGC Videsh Ltd, the overseas arm of the state explorer, last year teamed up with Oil India Ltd (OIL) to buy Videocon's 10 percent in the Rovuma Area 1 for USD 2.475 billion.
Subsequently, OVL on its own bought another 10 percent stake in the same field from Anadarko Petroleum Corp of the US for USD 2.64 billion.
The 10 percent stake of Videocon is currently split in 60:40 ratio and total payout for OVL for the back-to-back acquisitions is USD 4.125 billion.
Sources said an estimated USD 18.4 billion will be required to bring first set of discoveries on to production and convert that gas into liquid (liquefied natural gas or LNG) for ease of shipping to consuming nations like India.
OVL's share would be USD 2.944 billion, they said, adding that first LNG from the block is targeted for 2018-end.
The project with capacity to produce 20 million tonnes of LNG annually would be the world's largest LNG export site after ExxonMobil-run Ras Laffan in Qatar.
Rovuma Area 1 Offshore Mozambique Block (Block Area 1) is located along the coasts of northern Mozambique and southern Tanzania in the Indian Ocean. Block Area 1 has a total area of more than 10,000 square kilometres in water depths ranging 900 meters to 1,600 metres and about 30-60 kms from shore.
Area 1, which is operated by Anadarko, is estimated to hold 62 trillion cubic feet of gas reserves. So far, 7 gas fields have been discovered in the Block. Out of these, 3 fields -- Lagosta, Windjammer and Barquentine (collectively called the Prosperidade field) extend into the adjacent Block Area 4 where Italy's ENI with 70 per stake is the operator.
The other fields - Atum, Golfinho and a small field Tubarao, are independent fields lying fully in Block Area 1.
Anadarko and ENI have signed an agreement to jointly develop the common fields (Prosperidade) between Block Area 1 and Block Area 4 in the first instance and monetise them through construction of four LNG trains or plants with a capacity of 5 million tonnes per annum each, sources said.
To feed the LNG trains, gas required would be 24 Tcf, which will come equally from Block Area 1 and Area 4.
Other than Prosperidade field, Block Area 1 also has independent fields that can contain 47 Tcf of reserves, for which no plan has been firmed up so far, sources said.
A unit of state-owned Bharat Petroleum Corp Ltd (BPCL) already has a 10 percent interest in the Block Area 1, taking the total stake Indian firms hold in the block to 30 percent.
Woodlands, Texas-based energy-exploration company Anadarko holds 26.5 percent after the deal with OVL. Other partners in Area 1 include Mitsui with 20 percent stake, ENH (15 percent) and PTTEP (8.5 percent).
More from India
More from World
More from Sports
More from Entertaiment
- Cortana for Android available for public beta in US
- Xiaomi Redmi 2 Vs Redmi 2 Prime: Specification comparisons
- Middle class woes to continue, wholesale onion price shoots up to Rs 57 per kg
- Alleged land encroachment in Greater Noida: HC asks DM to decide representation in 3 months
- Watch: Review of Mahindra TUV300