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Anadarko-BPRL consortium on the hunt for buyers for its Mozambique gas

Kalpana Pathak /Mumbai 04 Dec 12 | 12:08 AM

Bharat Petro Resources Limited (BPRL) and its consortium partners are in discussions for marketing natural gas from its flagship international asset, Rovuma basin in Mozambique. The partners are eyeing sale of gas to Japan, South Korea and Taiwan.

Gas from the Rovuma basin may be brought to India, too. The partners are working on sale and purchase agreements. “The operator has formed marketing teams, which will be talking to companies in Japan, South Korea and Taiwan. These countries can pay more for gas and at this point in time we need to maximise our revenue as a consortium. However, at the same time, the consortium is also talking to Indian companies," said a senior BPRL executive.

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BRPL is a fully-owned subsidiary of Bharat Petroleum Corporation. The BPRL executive said the company and its partners will have to first enter into a long-term contract with buyers, which will enable them raise funds to finance the project. “This would help us put in our first two trains," the official added. Production from the fields will begin in 2018.

Anadarko, which has 36.5 per cent stake in the basin, is the operator. BPRL owns 10 per cent in the Rovuma basin. While Videocon owns 10 per cent; Mitsui has 20 per cent; Cove Energy owns 8.5 per cent, and Mozambique ENH holds 15 per cent in the basin. Among the Indian companies with which the consortium is holding discussions include BPCL, Petronet LNG and GAIL. Going forward, the list will expand.

Early this year, Anadarko announced recoverable gas in the range of 35 trillion cubic feet (tcf) to 65tcf from the basin. To begin with, the consortium plans to sell only 10 million metric tonnes in two trains.

BPRL and its consortium members have also decided to have a reserve certification in place before 2013-end. The partners have roped in DeGolyer and MacNaughton a petroleum consulting company based in Dallas, Texas for reserve certification. “Parallely, we are working on the Front End Engineering Design (Feed) contract, which will lead to the engineering, procurement and construction (EPC) contract. This is for construction of the liquefaction plant," the official said.

The two trains that the consortium will put in place would initially require around $18-20 billion, of which it would raise around $14 billion in long-term loans. “The rest will be brought in by the consortium members in individual capacity. Further investments would be taken care of from the revenues the project brings," the official added.

During the company’s annual general meeting in September, BPCL chairman and managing director R K Singh had said BPRL does not need BPCL’s balance sheet to raise funds because, given the sheer size of discoveries across its assets, banks are willing to lend money to the company.

BPRL is present in seven countries including India. Of these, assets the company owns in five countries have shown promising discoveries.

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