UAE’s Adnoc has agreed to buy Galp’s 10 percent interest in the Area 4 concession of the Rovuma basin in Mozambique, which includes Eni’s Coral South FLNG project. This is Adnoc’s second international LNG move in a week after it bought a stake in NextDecade’s Rio Grande LNG export project in Texas.
State-owned Adnoc said in a statement the acquisition from Portugal’s Galp will entitle Adnoc to a share of the LNG production from the concession, which has a combined production capacity exceeding 25 million tonnes per annum (mtpa).
Besides the operational Coral Sul (South) FLNG, the Area 4 concession includes the planned 3.5 mtpa Coral Norte (North) FLNG development and the planned 18 mtpa Rovuma LNG onshore facilities.
Area 4 is operated by Mozambique Rovuma Venture (MRV), a joint venture owned by Eni, ExxonMobil, and CNPC, which holds a 70 percent interest in the Area 4 exploration and production concession contract.
In addition to MRV, Galp, Kogas, and ENH each hold a 10 percent interest in Area 4.
Mozambique’s Rovuma supergiant gas basin represents one of the world’s largest gas discoveries in the past fifteen years and holds proven reserves to provide a stable supply of natural gas to the FLNG and onshore facilities, Adnoc said.
This strategic investment is Adnoc’s first in Mozambique and complements the company’s efforts to expand its lower-carbon LNG portfolio to meet growing gas demand, it said.
Adnoc did not reveal the price tag of the deal, but Galp said in separate statement it will receive about $650 million for its shares and shareholder loans, already net of capital gain taxes.
As of the transaction reference date, December 31, 2023, lease liabilities were $525 million, it said.
Additional contingent payments of $100 million and $400 million will be payable with the final investment decision of Coral North and Rovuma LNG, respectively, Galp said.
The transaction is subject to customary third-party approvals, with completion expected during 2024.
Adnoc’s LNG expansion
Earlier this week, Adnoc said it will buy an 11.7 percent stake in the first phase of NextDecade’s Rio Grande LNG export terminal in Texas from Global Infrastructure Partners.
Adnoc and NextDecade also entered into a 20-year LNG offtake agreement for the fourth Rio Grande LNG train.
The acquisition marks Adnoc’s first strategic investment in the US as it continues to deliver on its international growth strategy.
Adnoc owns a 70 percent stake in Adnoc LNG, that currently produces about 6 mtpa of LNG from its facilities on Das Island.
The firm also plans to take a final investment decision on its Ruwais LNG export project with a capacity of 9.6 mtpa this year.