Mozambique oil company set to begin search for $1.5bn LNG project funds next week

MOZAMBIQUE’S state-owned oil company will embark on a $1.5bn capital raising programme starting in Johannesburg next week in order to finance its 15% share of a large natural gas project run by Total SA, said Bloomberg News.

Empresa Nacional de Hidrocarbonetos (ENH) CEO, Omar Mitha, told the newswire the company had first won the support of co-investors in the project to fund its stake on the understanding the capital raising would follow.

The project – potentially transformative for Mozambique’s ailing economy – includes the development of the Golfinho and Atum fields and the nation’s first onshore liquefied natural gas plant, said Bloomberg News.

France’s Total operates the project with a 26.5% interest, after snapping up Anadarko Petroleum Corporation’s African assets earlier this year, said the newswire. Mozambique, one of the world’s poorest countries, is counting on the $23bn development to revive its economy after struggling to service its debt in recent years.

Area 1 LNG project will generate about $38bn of revenue for the government over its lifetime, according to a Finance Ministry forecast which will be supplemented by sales from a larger LNG project planned next door.

This second project is led by Exxon Mobil Corporation. ENH also has a stake in the venture, but its capital cost is yet to be determined. A final investment decision on that project is expected in April, Mitha told Bloomberg News.

Once gas production starts at the projects “… the risk factor will be reduced and we’ll have some kind of enhancement” in terms of funding, Mitha said. ENH is targeting all banks as well as private equity, he said.

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