In a move seen as further competition for Nigeria’s Liquefied Natural gas NLNG industry, Oil & Natural Gas Corp. (ONGC) and Oil India Ltd., India’s biggest state-run explorers, will pay $2.5 billion to buy a stake in a Mozambique natural gas field from Videocon Industries Ltd.
Oil India said Tuesday in a stock exchange filing, that the two Indian companies will buy Videocon Mozambique Rovuma 1 Ltd., which owns 10 per cent of the Rovuma-1 field in the waters of the African nation. The transaction, expected to close in the last quarter of 2013, was first announced by ONGC on June 10 and withdrawn the same day for being “premature.”
Nigeria exported some 19.6 million metric tons of LNG in 2012, the fourth-largest output worldwide, according to data compiled by research firm IHS. Qatar was first with 74.2 million metric tons.
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However the East African country has become a prominent destination for energy investment, especially by Asian companies, as it looks to develop the largest natural-gas discovery in a decade, and it could very easily eclipse Nigeria in coming years.
At a planned capacity of 20 million tons annually, the Mozambique project could be the world’s largest LNG export site after Ras Laffan in Qatar, where Exxon Mobil Corp. is a partner.
ONGC has acquired $8.5 billion of oil and gas assets outside India since September as it seeks to raise overseas production more than sixfold by 2030 and reduce the south Asian nation’s dependence on imports. The New Delhi-based company plans to spend 11 trillion rupees ($184 billion) by 2030 to add reserves in India and overseas and reverse a decline in output from ageing fields at home.
The two state-run companies will form a venture for the acquisition, which is subject to the approval of the Indian and Mozambique governments and their regulators and clearance from existing partners in the Rovuma-1 area.
Anadarko Petroleum Corp. and Eni SpA have been leading the effort to convert gas from the Indian Ocean fields in Mozambique to liquid and transport it to countries including India via tankers. Liquefied natural gas plants need billions of dollars in investment to chill the gas to a liquid and ship it using tankers.
