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ExxonMobil sees Rovuma and Golden Pass advantages @ Gastech in Houston, Texas

 

The record year for FIDs of additional LNG liquefaction capacity, with potentially more projects approaching sanction, has led to fears that the current supply glut could be replicated in the middle of the next decade.

And it has brought into sharp focus the need for competing projects to be differentiated. ExxonMobil pushed the go button on its 15.6mn t/yr Golden Pass joint venture with Qatar Petroleum (QP) on the US Gulf Coast in February. It is also making good progress, having received approval from the Mozambique government in May, with development plans for the 15mn t/yr Rovuma LNG project.

The firm is confident that its two projects have what it takes to stand out from the crowd, Alex Volkov, ExxonMobil’s vice-president for global LNG marketing, tells Petroleum Economist at the Gastech conference in Houston.

Rovuma has the advantage of geography, says Volkov, given that is close to growing demand centres in south Asia, China and other emerging markets in Asia-Pacific, as well as a “reasonable distance” from the Atlantic Basin if it needs to divert supply there.

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The “sheer size” of the resources in Mozambique’s Area 4 gas fields, is another boon. “This is a legacy type of development,” says Volkov. “It is 15mn t/yr in its first phase but that is just what it is, a first phase. The resource base is such that it allows us to build subsequent phases when the market is ready for them.”

And Rovuma LNG has also benefited from “tremendous” support from the host government, says Volkov. “Obviously, it is a developing country—a lot of things needed to be done on the ground to provide for security, for ease of doing business. The project itself is in a remote area of Mozambique. We enjoyed tremendous support from the government, which understands the value the project brings to the country.”

Golden Pass has an obvious cost advantage in being a brownfield site, having been initially developed to import LNG to the US before the implications of the shale gas boom were fully realised. “Substantial portions of the infrastructure are already in place—the jetty is there, the channel is there, the tanks are there,” says Volkov. “It is one of the remaining brownfield projects that obviously hold cost advantages over greenfield developments on the US Gulf Coast.”

But Golden Pass has another potential ace in its pocket—the marketing structure of the project, where the total output is contracted to Ocean LNG, a 70:30 joint venture between QP and ExxonMobil. “The other joint ventures we have with QP bring opportunities,” says Volkov. “Having Golden Pass as another supply point alongside Ras Laffan will allow us to bring significant transportation optimisation and generate additional value.

“That is an important distinction between Golden Pass and any other Gulf Coast project, which is basically a single supply point in isolation.”

credit :club Mozambique

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Updated: September 20, 2019 — 5:36 PM
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