New Delhi. The country’s government company ONGC Videsh Ltd. (OVL) has informed that the 53-month ban on Mozambique’s big LNG project has ended. With this, work on this project worth 21 billion dollars (about Rs 1.70 lakh crore) has started. Indian companies have 30 percent stake in this project. This project was stuck due to security reasons arising after the terrorist attacks, the way for its resumption is now clear.
French energy company Total Energies and its partners, the operator of this project, have lifted the force majeure ban imposed on the project in Mozambique. This situation was in force since mid-2021 due to deteriorating security in the northern Cabo Delgado province of the African country. TotalEnergies had said last week that the supply of LNG from this project can start by the year 2029.
Where is this project starting?
OVL said the safety situation at the Area-1 Mozambique LNG project in the Cabo Delgado Province (CDP) in the north of the country has improved significantly. Now the Area-1 Mozambique LNG Consortium has notified the Government of Mozambique to end the work stoppage due to force majeure declared on May 11, 2021, as per the situation. This will help in resuming construction activities for early completion of the project.
What is the stake of the government company?
ONGC Videsh Limited, the foreign investment arm of government company ONGC, has 16 percent stake in this project, while a unit of Bharat Petroleum Corporation Limited (BPCL) has 10 percent stake. Oil India Limited also has 4 percent stake in it. The project involves the development of the Golfinho and Atum fields located in Offshore Area-1 and construction of plants that can convert the gas into its liquefied form (LNG) and export it to consumer countries through ships. This Area-1 has more than 75,000 billion cubic feet of gas resources.
Who has how much stake in this project?
TotalEnergies operates Mozambique LNG with a maximum stake of 26.5 percent. ENH Rovuma Area Um, SA holds a 15 percent stake, while Mitsui E&P Mozambique Area-1 Limited holds a 20 percent stake and PTTEP Mozambique Area-1 Limited holds 8.5 percent. Indian companies have the highest stake in this project, which is 30 percent. But, this stake is shared by many companies.
Why was the project banned?
The Mozambique LNG Project (Area 1) was started in the north of Cabo Delgado province, which was under the control of Islamic State terrorists. Terrorist attacks affected the construction work and it was stopped in May 2021 as the security situation deteriorated. The construction of the project started in the year 2019, but had to be stopped after two years. This project was one of the world’s largest gas discoveries.
Why is the project important for India
With the help of Rwanda and other countries, the Mozambican Army pushed back the rebels. After the security issues were resolved, it was decided to start the project once again. This project is very important for India, because it will be easy to supply LNG from here to India, which will reach there within just 3 to 7 days. At present, the target is to start the project in 2026-27, which was earlier to be started in 2024. After the commencement of this project, it will help a lot in meeting the energy needs of the country along with Indian companies.
