Italian hydrocarbon company ENI has received approval to commence work on the first phase of the development of five trillion cubic feet of natural gas from the Coral gas field in northern Mozambique.

The company’s Development Plan received approval from Mozambique’s Council of Ministers (Cabinet) when it met in Maputo on Tuesday. ENI is the operator in offshore Area Four in the Rovuma Basin and it is estimated that the Coral field contains 16 trillion cubic feet of gas.

The field is located about 80 kilometres off the coast of Cabo Delgado province where ENI plans to install a floating Liquefied Natural Gas (FLNG) facility to facilitate the production of 3.4 million tonnes of LNG per annum.

The approval of ENI’s Plan of Development is an important step towards the company making its Final Investment Decision (FID), which should take place later this year and enable construction of the FLNG to begin. The project has already received its Environmental Licence.

ENI Chief Executive Claudio Descalzi says “approval of the Coral Plan of Development is a historical milestone for the development of our discovery of 85 trillion cubic feet of gas in the Rovuma Basin”.

“It is a fundamental step to progress toward the Final Investment Decision of our project which envisages the installation of the first newly built Floating LNG facility in Africa and one of the first in the world. We are proud of ENI’s partnership with Mozambique, a key country in the company’s strategies.”

ENI also discovered gas in the Mamba field which straddles Area Four and neighbouring Area One and which operated by the United States company Anadarko. In December, the two companies entered into a unitisation agreement for the use of this gas, which will be processed onshore, on the Afungi Peninsula in Palma district.

ENI is the operator of Area Four with a 50 per cent indirect interest owned through ENI-East Africa, which holds 70 per cent of the concession. Another 20 per cent held via ENI-East Africa belongs to the Chinese company CNPC. The other three partners, with ten per cent each, are Kogas of the Republic of Korea, Galp Energia of Portugal, and Mozambique’s National Hydrocarbon Company, ENH.

Source: AIM