Anadarko Executes Mozambique LNG Contract

Anadarko Petroleum Corp. has reached full agreement with a joint venture (JV) of McDermott International, Inc., Saipem and Chiyoda Corp., for an engineering, procurement and construction (EPC) contract for the Mozambique Area 1 Liquefied Natural Gas (LNG) Development that it is spearheading, McDermott and Saipem reported Wednesday.

The EPC contract hinges on Anadarko issuing a full notice to proceed, which it is expected to do after reaching a final investment decision (FID) on the onshore LNG liquefaction project, Saipem noted in a written statement emailed to Rigzone. Saipem is leading the CCS JV and stands to earn approximately USD 6 billion from the contract.

“After many years of dedication to this project, we are very happy to announce that we have reached full agreement for the contract,” stated Saipem CEO Stefano Cao. “We look forward to mobilizing our teams to site after Anadarko issues notice to proceed following the final investment decision.”

Anadarko’s partners in Mozambique LNG, which would transport gas produced offshore the East African country to an onshore liquefaction facility, include Empresa Nacional de Hidrocarbonetos E.P. (ENH), Mitsui E&P Mozambique Area1 Ltd., ONGC Videsh  Ltd., Bharat PetroResources Ltd., PTT Exploration & Production Plc and Oil India Ltd. Gas processed into LNG would originate from the Prosperidade and Golfinho/Atum fields in Mozambique’s Offshore Area 1.

In a separate written statement, McDermott reported that the CCS JV’s project scope includes onshore EPC for all components of the onshore LNG development. The onshore component includes two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum (MTPA) as well as associated utilities and infrastructure, stated McDermott, which anticipates receiving USD 2 billion for the initial portion of the EPC contract. The firm added that CCS JV has already provided FEED services for Mozambique LNG.

“The Area 1 Mozambique LNG project will build on McDermott’s industry-leading experience and demonstrate our ability to deliver comprehensive EPC solutions globally for world-scale LNG developments,” Samik Mukherjee, group senior vice president for McDermott’s Projects unit, stated.

McDermott and Saipem stated that Milan, Italy-based teams from both firms will oversee project management, engineering and procurement prior to sharing on-site construction management duties. Moreover, McDermott noted that it will perform engineering work from London, U.K. and Gurgaon, India. The company added that Chiyoda will only provide advisory services for the CCS JV.

The Anadarko-led project is one of the major LNG export projects planned for Mozambique. Exxon Mobil Corp. and Eni S.p.A. are leading the Rovuma LNG project, whose partners include CNPC, ENH, Galp and Kogas.