By ALEXIS FLYNN
ABERDEEN, Scotland -- Royal Dutch Shell is pitching its
floating liquefied natural
gas technology direct to the government of Mozambique as
way to gain entry to one of the world's hottest energy plays,
after the oil major failed to buy its way into huge gas
discoveries offshore East Africa.
The presentation of the technology during a visit by
Mozambique's president, Emilio Guebuza, to the home of the UK
oil industry, suggested Shell is looking for ways to bypass the
companies which have made the gas discoveries -- US-based
Anadarko Petroleum and Italy's Eni -- and deal directly with
"We are the leading
independent company in the world of integrated gas today,"
Bruce Steenson, Shell Australia's vice president of technical
and the Prelude project, told an audience of
government officials from Mozambique in Aberdeen, Scotland.
"Hopefully we can use that capability to forge some
long-lasting partnerships with Mozambique."
Mozambique could eventually become one of Africa's biggest
energy exporters, following the discovery of giant natural
gas fields in the deep waters off its northeast coast. The
discoveries are ideally placed to serve Asian export
Shell tried to gain a foothold in the region last year by
bidding $1.8 billion for Anadarko's junior partner, UK-listed
Cove Energy. However, Shell was outbid by Thailand's PTT Exploration & Production.
In May, Shell revealed it has been in talks with Anadarko about
acquiring a stake in its Mozambique fields, but had pulled back
because the asking price was too high.
Mr. Guebuza said Thursday that he wants Mozambique's first
exports to start shipping in 2018, an ambitious deadline in a
country that has no established oil and gas industry and
Shell's floating LNG vessels produce, liquefy and transfer
gas to tankers for export, removing the need for a costly and
complex onshore terminal. The technology is being used on a
project in Australia with a similar five-year development
schedule and could be one solution for Mozambique, said Mr.
Shell took the decision to deploy a $10 billion floating LNG
vessel on Australia's Prelude field in 2011 and it is due to
start operating late in 2016 or early in 2017, said Mr.
Steenson. The Prelude vessel, the first of its kind in the
world, will produce around 5.3 million tpy of LNG and
condensate, he said.
At present, the rights to export LNG from Mozambique rest
with the firms operating the concessions where most of the 108
trillion cubic feet of natural gas have been found, said
Arsenio Mabote, chairman of the Mozambique's state-controlled
National Petroleum Institute Thursday. Talks with the companies
on how best to proceed with the development should conclude
within in the next few months, he said.
Anadarko and Eni have said that they want to develop an LNG
plant together, although some industry analysts say a project of the scale envisaged by
the Mozambique government would likely require additional
investment from larger companies with better-established LNG
The government of Mozambique expects it will cost at least
$40 billion to develop its natural
gas infrastructure. This includes facilities capable of exporting 20
million tpy of LNG, and a local distribution hub that will
service its domestic energy needs and those of its near
Calls to Anadarko and Eni for comment weren't immediately
answered. Speaking last October, Eni's head of exploration and production Claudio
Descalzi said Shell, "could be a wonderful partner."
In a separate announcement Friday, Eni said it has completed
a deal to sell 20% of its Mozambique gas discoveries to China
National Petroleum Corp. for $4.21 billion.
Shell could make its technology available for use in
Mozambique without having to become an equity partner in the
gas discoveries, Mr. Steenson said.
"In Woodside's Pluto venture, we don't participate as an
equity partner, but we provided technical services to Woodside
to enable them to design and build the facility," said Mr.
Steenson, referring to an Australian LNG project. He also
highlighted similar partnerships with Chevron at the Gorgon and
projects, also in Australia.
Dow Jones Newswires