Pertamina cancels Mozambique LNG offtake deal
Indonesian state-owned Pertamina has cancelled its 1mn t/yr 20-year des offtake deal from the planned 13.1mn t/yr Mozambique LNG terminal, a company spokesperson confirmed to Argus today.
"There is no [penalty] because there is force majeure, so it is an agreement between both parties," Pertamina said. It signed the offtake agreement in 2019 (see tables).
The planned terminal reached financial close in 2019, but construction has been halted since April 2021, after conflict near the facility broke out. Operator TotalEnergies is eyeing a return to the project and is in negotiations with construction firms to restart works, with a view to launching commercial operations in 2028.
TotalEnergies offered no comment in response to an Argus queries to how Pertamina's cancellation could affect the project, and whether new capacity would be marketed.
Since the offtake agreements were signed, no other firm has said publicly that it has cancelled. "The Mozambique LNG contracts have not been affected," TotalEnergies chief executive Patrick Pouyanne said on 27 April.
Oil-linked offtake contract prices have risen in recent years, so if offtakers opt out and sign new agreements with other projects, they are likely to pay more. Oil-linked slopes have risen in recent years from about 10 to 13pc, BP vice-president for LNG trading Jonty Shepard said at the World LNG Summit in Athens last week.
Mozambique exports LNG through the 3.4mn t/yr Coral Sul floating liquefaction unit. Other planned projects in the country include ExxonMobil's 18.1mn t/yr Rovuma LNG terminal, and the Coral Norte 3.4mn t/yr floating liquefaction terminal.
Indonesia has considered limiting its own LNG exports to ensure sufficient gas supply for its own needs, as domestic production falls. The country exports LNG, but has no offtake agreements beyond 2027 from its 11.5mn t/yr Bontang terminal.
| Mozambique LNG offtakers | mn t/yr | |
| Offtaker | Term (yr) | Volume |
| Offtake deals | ||
| CNOOC | 13.0 | 1.5 |
| Shell | 13.0 | 2.0 |
| Tokyo Gas, Centrica* | 20.0 | 2.6 |
| BPCL | 15.0 | 1.0 |
| EDF | 15.0 | 1.2 |
| Tohoku Electric | 15.0 | 0.3 |
| Jera, CPC | 17.0 | 1.6 |
| Total | 10.2 | |
| Cancelled deal | ||
| Pertamina | 20.0 | 1.0 |
| * Delivery to PTT | ||
| Mozambique LNG shareholders | % |
| Shareholder | Stake |
| TotalEnergies | 26.5 |
| Mitsui | 20.0 |
| ONGC Videsh | 10.0 |
| PTTEP | 8.5 |
| BRPL | 10.0 |
| Beas Rovuma Energy | 10.0 |
| ENH Rovuma | 15.0 |
Related news posts
Hoekstra to face 'tough' EU parliamentary hearings
Hoekstra to face 'tough' EU parliamentary hearings
Brussels, 18 September (Argus) — EU climate commissioner Wopke Hoekstra, who has been nominated again for the role, is expected to face "tough" hearings in the European Parliament, according to a senior European official. The official told Argus that Hoekstra might have a "slight" advantage, as he underwent parliamentary hearings in 2023 when he took over fellow Dutchman Frans Timmermans' climate portfolio. At the time, Hoekstra was questioned extensively about past work with Shell and on climate issues. European Commission president Ursula von der Leyen put forward new commissioner candidates on 17 September, assigning Hoekstra the climate, net-zero, and clean growth portfolio. All candidates will undergo hearings before the EU parliament votes on the new commission line-up. Hoekstra has said he is "honoured and humbled", but formal appointment depends on how he performs during the hearings before the European Parliament's energy, environment and other committees. Hoekstra's mandate would include drafting legislation to enshrine a 90pc cut in greenhouse gas (GHG) emissions by 2040, from 1990 levels, into European law. The commission's 2040 target, revealed in February, referred to a "net GHG emissions reduction of 90pc". Hoekstra last year made a "personal" commitment to defend a "minimum target of at least 90pc" net GHG cuts. Von der Leyen has tasked Hoekstra with designing climate policies for the post-2030 period and developing an Industrial Decarbonisation Accelerator Act. Other key objectives include channelling investment toward net-zero infrastructure and ensuring revenues from the EU's emissions trading system (ETS) are used "effectively" to drive decarbonisation. Hoekstra's responsibilities extend to advancing a single market for CO2, boosting carbon removals for hard-to-abate sectors, and phasing out fossil fuel subsidies. Hoekstra would work closely with former Danish climate minister Dan Jorgensen, who is nominated for the energy and housing portfolio, if both are appointed. Jorgensen will be responsible for advancing the Electrification Action Plan for industrial transition and overseeing a roadmap to phase out Russian energy imports. He is tasked with ensuring the "full use" of joint procurement mechanisms, with a mandate to extend the current aggregated demand system from gas to include hydrogen and potentially other commodities. Supervising both Hoekstra and Jorgensen, in addition to von der Leyen, will be Teresa Ribera, Spain's former climate minister. Ribera has been nominated as executive vice-president for a clean, just and competitive transition. European Parliament officials expect to receive financial declarations and other procedural documents in the coming days. That will allow parliamentary committees to send written questions to Hoekstra and other nominated commissioners, officially kicking off the hearing process. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop 29 presidency sets out initiatives, summit agenda
Cop 29 presidency sets out initiatives, summit agenda
London, 17 September (Argus) — The president-designate of the UN Cop 29 climate summit, Azerbaijan's Mukhtar Babayev, has set out 14 initiatives and a detailed agenda for the conference, including a new focus on methane reduction and tackling barriers to a "clean hydrogen" market. There is an "urgent need to harmonise international frameworks, regulations and standards to create viable business models" for hydrogen, Babayev said. The Cop 29 presidency will build on the declaration of intent on mutual recognition of hydrogen certification schemes, made at Cop 28 last year, it said. It plans to launch a framework to set priorities ahead of Cop 30, scheduled for November 2025 in Brazil. The Cop 29 presidency also aims to tackle "the growing problem of methane from organic waste", it said. Methane — a potent greenhouse gas (GHG) — is often a focus at Cop summits, although typically with an eye to the largest emitters, the agriculture and fossil fuel industries. Babayev has called for governments to commit to targets to cut methane from organic waste in their climate plans, as well as for more signatories of the Global Methane Pledge. The pledge, launched in 2021 at Cop 26, asks signatories to cut methane emissions by at least 30pc by 2030, from 2020 levels. The Cop 29 presidency has also developed a two-pronged pledge, which seeks to scale up global installed energy storage capacity to 1.5TW by 2030 and add or refurbish more than 80mn km of power grid by 2040. It has developed a "green energy zones and corridors" pledge as well, to maximise sustainable energy generation and ensure "cost-effective transmission over large distances and across borders". Babayev provided further details of a planned climate fund , which will be capitalised by fossil fuel producing countries and companies. "We believe that countries rich in natural resources should be at the forefront of those addressing climate change," Babayev said, noting that the direction came from Azerbaijan's president Ilham Aliyev. The fund will be a public-private partnership, with "concessional and grant-based support to rapidly address the consequences of natural disasters" in developing countries, Babayev said. It will "provide offtake agreement guarantees for small and medium-sized renewable energy producers and first-loss capital for green industrial projects", with a focus on food and agriculture, he said. Cop 29 is set to take place in Baku, Azerbaijan on 11-22 November. It will be the first Cop hosted in the Caucasus region, Babayev noted. He flagged the "extreme heat [and] water scarcity" the region faces, but also pointed to its wind and solar power potential. Topics of other programmes set out today include water, climate action in tourism and a peace initiative which emphasised the "interplay between conflict and climate change". By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Von der Leyen puts forward EU commissioner candidates
Von der Leyen puts forward EU commissioner candidates
Brussels, 17 September (Argus) — European Commission president Ursula von der Leyen today presented candidates for commissioner posts, confirming names put forward for portfolios including climate, energy, agriculture and trade. Von der Leyen — who was confirmed by European Parliament as Commission president on 18 July — has committed to doubling down on climate and energy policy. Her 2024-29 mandate stipulates greenhouse gas emissions cuts of at least 90pc by 2040 compared with 1990. Her commissioners, if appointed, will implement those policies. She is nominating Teresa Ribera to oversee competition policy but also "clean, just and competitive transition" that would include energy, climate, environment and other Green Deal files. Ribera is Spain's deputy prime minister and responsible for the country's ecological transition. Von der Leyen has proposed the current EU climate commissioner Wopke Hoekstra for the portfolio of climate, net-zero and clean growth. Hoekstra, who replaced previous Green Deal commissioner Frans Timmermans , will also be responsible for taxation. Other nominees include former Danish climate minister Dan Jorgensen, up for energy and housing commissioner. Former Swedish minister for EU affairs Jessika Roswall is proposed for a portfolio including environment and circular economy, and Luxembourgish Christophe Hansen, a former member of EU parliament, is proposed as agriculture and food commissioner. Von der Leyen now needs to ensure that candidate-commissioners are approved by parliamentary committees and then by plenary. Hearings will also focus on candidates' abilities to implement policies. "Parliamentary scrutiny will not cut corners," European Parliament president Roberta Metsola said. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
East Timor takes stake in Bayu-Undan gas field
East Timor takes stake in Bayu-Undan gas field
Darwin, 17 September (Argus) — The partners in the Bayu-Undan joint venture (BUJV) gas project have agreed to transfer a 16pc stake to East Timorese state-owned firm Timor Gap. A sale and purchase deed has been signed, with Timor Gap to participate in BUJV for the remainder of the project's lifespan, with the production-sharing contract for Bayu-Undan running to 30 June 2026 or until extraction ends, said operator Australian independent Santos. The deal follows an initial agreement in 2023 with Timor Gap on the proposed Bayu-Undan carbon capture and storage project, which Santos chief executive Kevin Gallagher recently described as the "next big project we really want to focus on" . BUJV includes the near-depleted gas field located 500km northwest of Australia in East Timorese waters, which formerly produced feedstock for the 3.7mn t/yr Darwin LNG terminal operated by Santos. Darwin LNG is preparing to receive next year the first gas from Santos' Barossa project , while Bayu-Undan continues to produce natural gas liquids and for the Australian domestic market. Santos will hold a 36.5pc interest in BUJV following the transfer, Japanese upstream firm Inpex 9.6pc, Tokyo Timor Sea Resources, owned by Japanese utility groups Jera and Tokyo Gas 7.7pc, Italian energy firm Eni 9.2pc and South Korean upstream firm SK E&S 21pc. Timor Gap is the majority shareholder in the Greater Sunrise LNG project, presently in the concept select phase . The Australian government is pressing for more action after years of stalled progress with concerns China could instead develop the field in partnership with East Timor. Greater Sunrise partners Timor Gap with 56.56pc, Australian independent Woodside with 33.44pc and Japanese utility Osaka Gas with 10pc. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more