Exxon expands Mozambique LNG project to cut costs ahead of bank talks

(Reuters, London, 12 July 2018) Exxon Mobil will expand its Rovuma liquefied natural gas (LNG) project in Mozambique by half to cut production costs as the partners prepare to book the plant's supply and formally tap lenders in September, the company told Reuters. The U.S. oil giant took charge of the East African LNG project's onshore operations following a $2.8 billion deal with Italy's Eni last year, adding to its suite of projects in Qatar, Papua New Guinea, Russia and the United States. Mozambique's two rival LNG projects are ramping up to take final investment decisions (FID) in 2019 and both are teeing up buyers and loans to underpin hefty construction costs. But there the similarities end. Anadarko Petroleum's approach involves raising a record $14-$15 billion from banks and export credit agencies (ECAs) to fund the build. At the same time, it is lining up long-term LNG sales deals with external companies in China, Asia and Europe to guarantee the loans. Exxon in contrast will finance a larger share of costs from its own pockets as well as drawing on project partners, including Eni, Korea Gas Corp and China National Petroleum Corporation, bank and industry sources say.