Mozambique, striving to become one of Africa's top energy producers, plans to export its first...

Mozambique, striving to become one of Africa's top energy producers, plans to export its first liquefied natural gas by 2018 but ~$40B of infrastructure, including a terminal to export 20M metric tons of LNG, is needed first. It remains unclear who will build the plant; Eni (E) and Anadarko (APC) operate the concessions where most of the 108Tcf of gas have been found, and are talking with the government.

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  • Mike Walker
    , contributor
    Comments (390) | Send Message
    Anadarko is likely in talks with both Shell and Exxon to forge a 'Lucius' like deal to swap Anadarko's 10% interest for backend capital investment in the development phase, including the LNG plants.


    It is also probable that the LNG plant will be constructed by a consortium with little or no interest owned by Anadarko and LNG from the fields liquified at a 'per MMCF' rate.


    The extent, reservoir quality and proximity to shore of these East African gas reservoirs guarantees they will be economically superior to LNG produced offshore Australia, Qatar or from the unconventional North America plays.


    25 Jul 2013, 12:09 PM Reply Like
  • gcmagone
    , contributor
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    Is it better to own APC or E ? What is a "Lucius" deal?
    25 Jul 2013, 01:57 PM Reply Like
  • Mike Walker
    , contributor
    Comments (390) | Send Message
    I'd say APC is the better buy of the two. E is more 'value priced' and sports an attractive dividend but has its own set of challenges.




    The carry involves trading off equity for project funding. If Anadarko simply 'sold' interest they would owe taxes both in Mozambique and in the US for gain on sale, making the sale considerably less attractive.


    Disclosure - long APC shares and short various puts and calls on the underlying.
    25 Jul 2013, 02:42 PM Reply Like
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