FUTHER AFRICA:
PTTEP to start Mozambique LNG project by end of year
,
Africa, Economy, FDI, Finance, Gas, Infrastructure,
Mozambique,
Natural
Resources, oil,
SADC, South Africa, Bangkok Post
The
first phase of PTTEP’s LNG project in Mozambique’s Rovuma Offshore Area 1 is
expected to be completed within 2021.
PTT
Exploration and Production Plc (PTTEP) expects to start the development of a
liquefied natural gas (LNG) project in Mozambique’s Rovuma Offshore Area 1 by
the end of this year, says the company’s president and chief executive Somporn
Vongvuthipornchai.
According
to the schedule, the first phase is expected to be completed within 2021 with
an annual output of 12 million tonnes, he said.
Of
the total, 3.6 million tonnes will be delivered to Thailand through its parent
company PTT Plc, the country’s national oil and gas conglomerate.
PTTEP
acquired an 8.5% share in the project from Britain-based Cove Energy in May 2012
for US$1.92 billion. US-based Anadarko Petroleum is the operator of the
project.
The
operator is now preparing gas sales agreements and project finance. Bidding for
engineering, procurement and construction will soon be opened.
Mr
Somporn said this project will be a major LNG resource for Thailand in the
future because the country would have to import as much as 22 million tonnes of
LNG a year, up from the current 4 million tonnes a year.
Although
global oil prices remain low, Mr Somporn said he is confident the production
cost of LNG from the Rovuma A1 project would remain competitive.
For
2016, he said PTTEP planned to trim production costs by 10% from $3.43 billion,
including operating and capital expenditures.
It
planned to cut production unit cost to $34.22 per barrel from an average of $39
a barrel the previous year.
Last
year, the company cut its operating costs by 20% and reduced capital
expenditure by 30%. It also trimmed its production unit cost to $39 per barrel
from $43.50 a barrel in 2014.
Cash
cost will also be trimmed this year to $14.50 from $16 in 2015 and $21 in 2014,
he said.
“We
have to monitor global oil prices and keep down our production costs to stay at
a competitive level,” said Mr Somporn.
This
year, PTTEP targets petroleum sales at 322 kilo barrel of oil equivalent — the
same volume as last year.
In
addition to cost competitiveness, the company’s strategy will focus on
Southeast Asia along with seeking strategic partnerships.
PTTEP
is also conducting a feasibility study for investment in renewable energy.
Despite
the collapse of global oil prices, PTTEP has allocated a budget for mergers and
acquisitions (M&A). If it signs any M&A deals, it would have cash on
hand of $3.2 billion.
PTTEP
shares closed yesterday on the Stock Exchange of Thailand at 74.50 baht, up
1.25 baht, in trade worth 1.05 billion baht.
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