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Eni launched Coral FLNG project (LU: 6-Dec-2017)
Eni announced that the Italian operator and its partners CNPC, Galp, Kogas and ENH, have launched the Coral South floating LNG project.
Eni announced that the Italian operator and its partners CNPC, Galp, Kogas and ENH, have launched the Coral South floating LNG project implementation phase. “During the ceremony all the drilling, construction and installation contracts for the production facilities were signed, as well as agreements with the Mozambican government for the regulatory framework and financing of the project.”
Coral South is the first project in the development of the considerable gas resources discovered by Eni in Area 4 of the Rovuma Basin, Eni said, adding that this achievement comes just three years since the drilling of the final exploration well in Mozambique. The Coral field, discovered in May 2012, is located within Area 4 and contains approximately 16 TCF of gas in place.
Despite the challenging gas price environment in the last few years, the launch of this project would be indicated that the LNG projects’ promoters are ready to take the market risks as expected demand from emerging markets is encouraging new LNG supplies.
The US$6.3 billion Coral FLNG will have a capacity of around 3.4 MMT/Y and will be the first FLNG in Africa and only the third globally. “The FLNG facilities construction will be financed through Project Finance covering around 60% of its entire cost. This is the first Project Finance ever arranged in the world for a liquefaction floater. The financing agreement has been subscribed by 15 major international banks and guaranteed by 5 Export Credit Agencies,” Eni remarked.
In October 2016, Eni and its Area 4 partners (CNPC, Galp, Kogas and ENH) signed an agreement with BP for the sale of the entire volumes of LNG produced by the Coral South project for a period of over twenty years.
Eni is the operator of Area 4, through its participation in Eni East Africa (EEA), which holds a 70% participating interest in the concession while Galp, Kogas and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), each hold 10% stake. Eni holds 71.4% shares of Eni East Africa with China’s CNPC holding 28.6%.
In March 2017 Eni signed an agreement to sell 50% of its shares in EEA to ExxonMobil, which will be completed subject to satisfaction of a number of conditions precedent, including clearance from Mozambican and other regulatory authorities.
Earlier, Business Korea reported that Samsung Heavy Industries (SHI) is about to sign a US$2.5 billion deal to build a floating LNG facility for the Coral FLNG venture as the project’s partners recently held a steering committee meeting and made a final investment decision (FID) on the Area 4 development project.
SHI formed a consortium with Technip and JGC to participate in the Coral FLNG tender and was selected as preferred bidder. For the Coral FLNG project, SHI will be responsible for the EPC of the FLNG facility and construction of the topside, while Technip and JGC will be in charge of the engineering and procurement of the topside, which requires a high level of engineering skills and expertise with long period of experiences and risks.


On 6-Dec-2017, Eni said that it has closed $4.7 billion financing for its Coral South FLNG project as the deal was split between seven banks.


Related Stories:

ExxonMobil to Acquire 25% interest in Mozambique Area 4 from Eni
Eni approves investment plan of Coral South FLNG project
SHI may win Coral FLNG facility contract

Source(s) GLNGI Staff, Image courtesy of Eni