Anadarko in Talks with Jera for Mozambique LNG Deal

Maritime Activity Reports, Inc.

June 25, 2015

Anadarko Petroleum  is in talks with newly formed Japanese joint-venture vehicle Jera, set to become the world's biggest buyer of liquefied natural gas (LNG), to sell long-term supply from its Mozambique export scheme.
 
The U.S. oil major's gas finds in Area 1 of Mozambique's Rovuma Basin will feed the initial 10 million tonnes per annum (mtpa), $23 billion LNG export project, which is due to start by 2021.
 
Jera is a joint venture between Tokyo Electric Power Co (Tepco) and Chubu Electric, Japan's biggest and third-biggest utilities, set up in April with an aim to become the cheapest LNG buyer in East Asia.
 
Anadarko and Jera are in talks over a long-term gas import deal, three industry sources said.
 
A Jera spokesman said the venture is in talks with various firms on new supplies but could not give details on individual projects due to confidentiality agreements.
 
"Anadarko are in talks with Jera to discuss potential Mozambique sales," one of the sources said.
 
The move shows how Jera's bulk purchasing power could be a swing factor in decisions on LNG projects that require huge investment and large long-term contracts to ensure viability.
 
Last year Anadarko had allotted two-thirds of the capacity of its planned 10 mtpa Mozambique LNG project, but needed more before taking a final investment decision, which is still pending.
 
Anadarko spokesman John Christiansen said the project has more than 8 mtpa of LNG signed in non-binding deals, up on 2014 levels.
 
"We are progressing to long-term SPAs (sales and purchase agreements) with multiple customers in Asian markets, and we continue to make good progress with our marketing efforts," Christiansen said.
 
Jera already handles all new long-term fuel purchases for Tepco and Chubu. From next year it will also handle all existing LNG supply contracts and purchases, amounting to 40 mtpa.
 
Anadarko last year also signed a non-binding agreement with Japanese utility Toho Gas for 0.3 mtpa of Mozambican LNG, two industry sources said.
 
A Toho Gas spokesman said Mozambique was a strong candidate for new supplies and is one of the projects it is talking to, but declined to say whether it had signed a non-binding deal, citing confidentiality.
 
China's CNOOC, Indonesia's Pertamina, the United Arab Emirates, Thailand's PTT and Singapore are in talks with Anadarko.
 
 
(By Oleg Vukmanovic and Osamu Tsukimori; Editing by Dale Hudson)
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