Eni’s Coral South LNG Project On Track for 2022 Start-Up

Africa’s first floating liquefied natural gas (FLNG) vessel, the Coral-Sul, has arrived in Mozambique and is on track to start up one of only a few liquefaction projects slated to start service worldwide in 2022.

A rise in violence last year from militants with ties to the Islamic State group and pandemic-related issues has brought the country’s other two projects, TotalEnergies SE’s Mozambique LNG and ExxonMobil’s Rovuma LNG, to a standstill. The two majors have yet to confirm a date for when their projects may move forward, but TotalEnergies CEO Patrick Pouyanne reportedly said during a trip to the country Monday that the company is aiming to restart work on Mozambique LNG this year.

TotalEnergie’s decision to suspend activity in April 2021 “signals indefinite delays on its onshore Mozambique LNG complex…and also threaten ExxonMobil’s yet-to-be sanctioned Rovuma LNG. Together the two projects represent 28 million metric tons/year (mmty) of LNG capacity,” Rystad Energy LNG analyst Kaushal Ramesh told NGI.

Given the capacity delay, he said Rystad’s latest supply and demand outlook suggests a “balanced to tight market through 2023, and a material risk of shortage from 2024-2026, which will max out in 2025” at about 18 mmt.

“Therefore we expect elevated gas and LNG prices in the medium-term, which may only see some relief around 2027,” when other liquefaction projects sanctioned last year and those likely to reach final investment decisions (FID) this year will come online, Ramesh said.

Eni’s $7 billion Coral project reached FID in 2017. It was the first LNG project approved by Mozambique’s government to develop the deepwater Coral South offshore gas reserves in the Rovuma Basin.

Coral “demonstrates the strength of an FLNG solution which can offer speed to market compared to onshore solutions in challenging regions, “ Ramesh said. “As an ultra deepwater FLNG, the project managed to dodge the burden of the tense security situation in Cabo Delgado and has progressed largely on schedule, even while under construction in South Korea, and is on track to start producing LNG by the fourth quarter this year.”

The $2.5 billion, 3.4 mmty Coral-Sul vessel will be located around 30 nautical miles offshore. It is linked to six subsea natural gas wells in the Coral field.

All of Coral-Sul’s capacity was sold to BP plc under a 20-year supply agreement signed in 2016. BP plans to use LNG from the contract to help meet its global supply commitments.

The Calcasieu Pass LNG terminal and a sixth train at the Sabine Pass LNG facility in the United States, along with a third train at Tangguh LNG in Indonesia, are the only other liquefaction facilities other than Coral-Sul expected to come online this year.

TotalEnergies’ $20 billion Mozambique LNG includes the development of the Golfinho and Atum fields offshore Mozambique and a two-train 12.9 mmty onshore plant. TotalEnergies achieved FID in 2019 and reported that the project was 21% completed as of the end of 2020.

After TotalEnergies’ force majeure in April 2021, indications were that construction could possibly stall for a year. “Since then, counterinsurgency forces have made some progress increasing stability,” Ramesh added.

Rystad anticipates that TotalEnergies and its partners will need to see a sustained period of calm before making a decision to restart construction, which could take another year. “So, our latest outlook for Mozambique Area 1 to start production is now 2027,” Ramesh said.

Rovuma, led by ExxonMobil and Eni, was expected to take FID in 2020 but was also postponed. Ramesh said the project is unlikely to progress until Mozambique LNG restarts construction.

Project partners, Portugal’s Galp Energia SGPS SA and Korea Gas Corp. have not included Rovuma in their capital expenditure plans for the next two years, signaling an FID in 2025 at the earliest, according to Rystad. The 15 mmty project includes two onshore liquefaction trains that would be fed by 24 offshore wells. (Source:

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