State-owned energy firms Oil India Ltd (OIL) and ONGC Videsh Limited (OVL), the international arm of ONGC, and their foreign partners have secured senior debt financing of $14.9 billion for the LNG project in Mozambique. Led by French energy giant Total, $24.1 billion liquefied natural gas (LNG) project envisages producing 12.88 million tonnes per annum of LNG from gas discovered in Area-1, offshore Mozambique.
"Rovuma Offshore Area 1 consortium (Area-1), led by Total confirms, the finalisation of the Mozambique LNG senior debt financing of $14.9 billion for the two train LNG project on July 15, 2020," OIL said in a filing to the Bombay Stock Exchange on Thursday.
The senior debt financing comprises a loan facility with the African Development Bank, loans from commercial banks and credit from other financing institutions, OIL said. The project expects to achieve financial closure in the fourth quarter of this year, it added.
The joint venture operating Area-1 had approved the final investment decision (FID) for the two train Golfinho and Atum Mozambique LNG project on June 18, 2019, OIL said.
The total cost of the project is estimated at $24.1 billion and is to be funded through a combination of debt ($15.8 billion), equity ($7.4 billion) and cash flow from operations ($0.8 billion).
Indian firms own a total of 30 per cent stake in Area-1, while Total, the operator of the project, holds 26.5 per cent stake. Mitsui of Japan has 20 per cent stake in the project, while PTT Exploration of Thailand holds 8.5 per cent and Mozambique's oil and gas company, ENH owns the remaining 15 per cent of shares.
Among Indian energy firms, ONGC Videsh holds 16 per cent stake in Area-1, while Bharat Petroleum Corp Ltd (BPCL) has 10 per cent. Oil India Ltd has 4 per cent interest.
The project will have a capacity of 12.88 million tonnes per annum of LNG and will source gas from the Golfinho-Atum (GA) field within Area-1, which is located 40 kms off the coast of Mozambique.
Of this, 11.14 million tonnes per annum of LNG, or 86 per cent of production capacity, has already been sold to offtakers from Japan, India, China, the Netherlands, Indonesia, and France.
The Area-1 project is expected to start in 2024 and reach full production by 2025.
By Chitranjan Kumar