The Abu Dhabi National Oil Company (ADNOC) announced a significant move in its global growth strategy on Wednesday, acquiring a 10% stake in Mozambique's Area 4 liquefied natural gas (LNG) project. This strategic investment marks ADNOC's first foray into the East African nation's energy sector and strengthens its position as a leading supplier of LNG.
The $650 million deal with Galp Energia, a Portuguese energy firm, grants ADNOC a share in the Rovuma Basin's vast gas reserves. The Area 4 concession encompasses the operational Coral South FLNG facility, with a production capacity of 3. 5 million tons per annum (mtpa), and the planned Coral North FLNG development, projected to mirror that capacity. Additionally, ADNOC gains a stake in the future Rovuma LNG onshore project, awaiting a final investment decision.
This acquisition aligns with ADNOC's commitment to expanding its lower-carbon LNG portfolio. The company emphasizes the project's design, which prioritizes reducing carbon dioxide emissions, and its alignment with ADNOC's ambition to achieve net-zero emissions by 2045.
Musabbeh Al Kaabi, ADNOC's Executive Director for Low Carbon Solutions and International Growth, highlighted the company's longstanding reputation as a reliable global LNG supplier. "This landmark investment strengthens our role in the world-class Rovuma Basin, " he stated, "as we deliver on our international growth strategy. "
Analysts suggest the deal offers several advantages for both parties. ADNOC secures a foothold in a promising LNG market, while Galp divests a portion of its stake to generate capital for further exploration and development endeavors. The agreement also bolsters Mozambique's position as a significant LNG producer, attracting further investment and fostering economic growth.
The acquisition comes amidst a period of global energy flux. The ongoing war in Ukraine has disrupted traditional energy supply chains, prompting countries to diversify their LNG sources. This trend positions Mozambique, with its abundant gas reserves, as a strategic player in the evolving energy landscape.
ADNOC's investment signifies its confidence in Mozambique's LNG potential and its commitment to playing a key role in supplying the world's growing natural gas demand. The deal is expected to be finalized in the coming months, following regulatory approvals.