Mozambique's Cabinet has approved changes to LNG contracts with Anadarko Petroleum Corp. (NYSE: APC) and Italy's Eni to allow the two companies to sell the government's share of gas from projects in the Rovuma Basin--the contracts relate to Anadarko's Dolphin Tuna project and Eni's South Coral project in areas 1 and 4 of the basin.
"The government opted to relinquish its right to receive in kind its quota of available gas as well as the gas production tax. The aim is to turn the projects viable," government spokeswoman Ana Coana said late on Dec. 6 after the amendments were approved by the Cabinet.
"The concessionaires commit themselves to a joint sale of LNG in order to offer huge volumes and get better prices at the market."
Eni is expected to make a final investment decision (FID) on its LNG project by the end of this year, while Anadarko's FID is expected in 2017.
Mozambique has about 85 trillion cubic feet of gas reserves--enough to supply Germany, Britain, France and Italy for nearly two decades. It is likely to take at least five years after FIDs before gas production begins.
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