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Tokyo Gas and Centrica sign LNG agreement

Tokyo Gas of Japan and UK company Centrica have signed a non-binding heads of agreement (HoA) with the Mozambique Area 1 joint venture partners for the long-term offtake of 2.6mn t/y of LNG, to be delivered ex-ship from the Mozambique LNG project from the start-up of production until the early 2040s. The supply agreement provides the project with key foundation customers which will facilitate the final investment decision (FID) by the Mozambique Area 1 joint venture partners.

The transaction represents the first long-term offtake agreement from Africa for both Tokyo Gas and Centrica in line with ongoing efforts to further diversify their respective portfolios of LNG sources. This will also enhance the liquidity and further develop the LNG market, state the companies.

The Mozambique Area 1 joint venture partners are Anadarko Petroleum (operator, 26.5% working interest), Mitsui (20%), ENH Rovuma (15%), ONGC Videsh (10%), Beas Rovuma Energy (10%), BPRL Ventures (10%), and PTTEP (8.5%).

Commenting on the announcement, Giles Farrer, Wood Mackenzie Research Director, noted: ‘In 2025, the full 2.6mn t/y [covered by the deal] would represent 25% of Tokyo Gas’ LNG contracted for procurement and more than double Centrica’s. The deal signals Mozambique's appeal to buyers in both basins and illustrates that European buyers are in the market for long-term LNG contracts as European import dependency rises.’

Previously announced sales and purchase agreements include 2.6mn t/y with PTT, 1.2mn t/y with EDFT and a basic agreement with Tohuku Electric for 0.28mn t/y. ‘The additional 2.6mn t/y will strengthen the project further and bring it closer to achieving the amount of contracts required to support financing – likely around 9mn t/y,’ says Farrer. ‘It could also encourage other buyers to finalise offtake from the project. Market intelligence indicates that other deals are close with Asian buyers, which could encourage those countries’ national export credit agencies to provide funds for the project.’

News Item details


Journal title: Petroleum Review

Region: Africa

Countries: Mozambique -

Subjects: Banking, finance and investment, Gas markets, Liquefied natural gas, LNG markets

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