Mozambique LNG Eyed to be Sold to Japan Market

Japanese trading house Mitsui & Co. on Tuesday said it is targeting to sell to the Japanese market some 5 million tonnes a year of liquefied natural gas (LNG) from a major field project in offshore Mozambique.

The offer is part of a half of two planned 5 million tonne per annum LNG production plants, called "trains."

Mitsui & Co. said it has received a lot of positive responses from prospective buyers as the Mozambique site helps to diversify LNG sources. Mitsui controls 20 per cent stake in the project, with Anadarko Petroleum Corp. of the United States holding 36.5 per cent and ENH, Mozambique's state-owned oil company, owning 15 per cent.

The reserve in the offshore field of the southeastern African project is touted to contain world-class deposits of at least 30 trillion cubic feet of gas.

LNG from Mozambique would take about 20 days by ship to Europe, Japan or other Asian LNG consumers. Project operator Anadarko Petroleum Corp. has earlier said the project's reserves could support a minimum of two up to a maximum of six LNG liquefaction plants, or trains.

Mitsui & Co. is expected to make its final investment decision on the project in 2013 with initial production forecast in 2018.

Japanese trading houses have been investing in Japan's LNG sector, with the latest being Itochu Corp. On Thursday, Itochu Corp. announced it plans to acquire a 25 per cent stake in U.S. oil and gas producer Samson Investment Co. for $1.04 billion.

Japan's LNG imports have risen at a record high as a consequence of the March 2011 earthquake and tsunami. The radiation crisis at the Fukushima Daiichi plant northeast of Tokyo crippled its nuclear power sector, ultimately racking up demand for gas supplies to fuel its gas-fired power generation grids. Over 80 per cent of Japan's nuclear plant capacity is now off-line.

But even then, Japan was already the world's largest LNG importer, buying 70 million tonnes from Malaysia, Australia, Indonesia and Qatar in 2010.