BP and its concession partners in Area 4 offshore Mozambique have entered a sales and purchase agreement for BP to buy 100% of the liquefied natural gas (LNG) produced by the Coral South Floating LNG (FLNG) facility.
Under the agreement, the oil and gas major will purchase the East African LNG for more than 20 years, conditional on a Final Investment Decision (FID) being taken on the project.
“BP is pleased to play a key role in enabling Mozambique to be an LNG exporting country,” BP’s Chief Executive of Supply and Trading, Paul Reed, said.
BP Buys All the Gas from FLNG Project
“The agreement adds to the diversity of our natural gas portfolio beyond the end of the decade, further enhancing our ability to meet the needs of our customers,” Reed stated further.
BP’s concession partners in Area 4 include Eni East Africa (EEA), Galp Energia, Kogas and Empresa Nacional de Hidrocarbonetos (ENH), holding a stake of 10% each.
The Coral South Floating LNG facility is operated by EEA and is expected to be installed offshore Mozambique.
Overall, the Coral South Floating LNG facility is expected to have a capacity to produce more than 3.3 million tonnes of LNG per year.
Meanwhile, an FID on the project is expected to be taken before the end of this year.
BP Buys LNG to Meet Demand
BP is expected to use the LNG from the contract to help meet its global supply commitments, the company informed in a statement, although the supermajor did not disclose any further details of the agreement.
Eni is the operator of Area 4 with a 50% indirect interest, owned through EEA, which holds a 70% stake in Area 4.
The Italian major received the approval of the plan of development for the Coral discovery in February, for the first phase of development of 5 trillion cubic feet of gas in the discovery located in Area 4.
The giant Coral discovery had been made in May 2012 and outlined in 2013 and is estimated to contain around 16 trillion cubic feet of gas in place.