MILAN: Eni on Friday finalised plans to develop Mozambique's Coral South offshore gas project, part of a larger scheme that will see Italy's top energy company and partners spend an estimated $50 billion.
Eni has discovered huge gas reserves in its Area 4 concession, offering Mozambique, one of the world's poorest countries, potentially lucrative liquefied natural gas (LNG) exports.
The Coral South project will require the construction of six subsea wells connected to a floating production facility capable of producing more than 3.3 million tonnes of LNG per year, Eni said.
Friday's approval by Eni's board of directors clears the way for final investment decision (FID) on the deep-water Coral South project once Eni's partners also approve it and financing has been underwritten.
Mozambican authorities approved the project's development plan in February and Eni has said it expects FID this year. Last month Eni signed a 20-year deal to supply BP with LNG from the project.
The Coral South field, discovered in May 2012, contains about 450 billion cubic metres (16 tcf) of gas in place.
Overall reserves discovered in Mozambique's Rovuma Basin in recent years amount to some 85 tcf, making it one of the largest finds in a decade with enough gas to supply Germany, Britain, France and Italy for nearly two decades.
Eni is the operator of Area 4 and holds a 50 percent indirect stake held through Eni East Africa, which owns a 70 percent stake in Area 4. Galp Energia, KOGAS and Mozambique's state energy firm ENH each own 10 percent.
China's CNPC owns a 20 percent indirect interest in Area 4 through Eni East Africa. Final approval of the project could add impetus to Eni's efforts to raise several billion of dollars by selling down its stake in Area 4 and bring onboard another partner or partners to help develop the field.
Sources have told Reuters US major Exxon Mobil has already clinched a deal to buy a stake in Area 4.
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