Mozambique LNG project, has secured a debt financing of US $14.9 billion, the biggest foreign direct investment in Africa, to start in 2024. India State-owned energy firms Oil India Ltd (OIL) and ONGC Videsh Limited (OVL) have confirmed the finalisation of the Mozambique LNG senior debt financing.
OIL and its international partners have secured the senior debt financing for the Mozambique LNG project comprising a loan facility with the African Development Bank (AfDB), loans from commercial banks and credit from other financing institutions.
The US $24.1 billion Mozambique LNG project is Africa’s biggest foreign direct investment and is expected to produce 12.88 million tonnes of LNG per annum from gas discovered in Rovuma Offshore Area-1.
The completion of the LNG senior debt financing for the two train Golfinho and Atum Mozambique LNG project was confirmed by the Rovuma Offshore Area 1 consortium (Area-1), led by Total.
READ: Will Africa’s largest LNG project Rovuma take shape?
The joint venture operating Area-1 had approved the final investment decision (FID) for the two train LNG project in 2019. The 12.88 million tonnes per annum of LNG will be sourced from the Golfinho-Atum (GA) field within Area-1, located 40 kms off the coast of Mozambique.
The funding will be done through a combination of US $15.8 billion debt and a combined US $8.2 billion equity and cash flow from operations.
The Area-1 project is expected to start in 2024 and start full production by 2025.
The financing achievement underscores the faith being shown in the project despite the effects of Covid-19 on the crude oil exploration and production.
A similar project led by Exxon Mobil Corp. to be constructed next to the facility, has stalled after the majority shareholder made a pronouncement to take the final investment decision (FID) in 2021 and not this year as was expected. Exxon Mobil cited low energy prices and the corona virus pandemic for its decision to postpone the FID.
Immediate commencement would have seen the development of Area 4 of the ultra-deep Rovuma Basin, a giant offshore natural gas field with up to 15 trillion cubic feet of natural gas located off the coast of Mozambique.
