Abu Dhabi National Oil Company (ADNOC) has made a significant move by acquiring a 10% equity stake in the Area 4 concession of Mozambique’s Rovuma basin from Portuguese energy firm Galp. This marks ADNOC’s first foray into Mozambique’s LNG market, positioning the company in one of the world’s largest gas discoveries.
The Area 4 concession includes the operational Coral South Floating LNG (FLNG) facility and planned developments such as the Coral North FLNG and Rovuma LNG onshore facilities. Together, these projects have a production capacity exceeding 25 million tonnes per annum (mtpa) of liquefied natural gas (LNG). The Coral South facility alone can produce up to 3.5 mtpa of LNG, with the Coral North development expected to add another 3.5 mtpa.
Strategic Expansion
Musabbeh Al Kaabi, ADNOC’s Executive Director for Low Carbon Solutions and International Growth, highlighted the importance of this acquisition: “This stake in the Rovuma basin is a critical step in building an integrated global gas business. It ensures that we can continue providing a secure, reliable, and responsible supply of natural gas, which is essential for meeting the world’s growing energy demands and supporting the energy transition.”
This acquisition aligns with ADNOC’s broader strategy to expand its lower-carbon LNG portfolio and support global energy demand. It follows ADNOC’s recent acquisition of an 11.7% stake in NextDecade Corp.’s LNG project in Texas, where it has secured a 20-year offtake agreement. These investments underscore ADNOC’s commitment to enhancing its global LNG capabilities and supporting the transition to cleaner energy sources.
Future Prospects
The Rovuma basin is central to Mozambique’s energy sector and has the potential to significantly impact the global LNG market. For ADNOC, this acquisition diversifies its asset base and provides access to a promising LNG source.
ADNOC Drilling, a subsidiary of ADNOC, is also planning an ambitious fleet expansion in 2024 to enhance its operational capabilities and meet increasing global demand efficiently.
Conclusion
ADNOC’s investment in Mozambique’s LNG sector represents a strategic milestone in its international growth strategy. As the world moves towards sustainable energy solutions, ADNOC’s focus on expanding its low-carbon LNG portfolio positions it well to meet future energy needs while supporting global energy transition efforts.
Photo source: Google
Montel Kamau
Serrari Financial Analyst
22nd May, 2024
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