CEO Al Walker signed off on what he called the biggest ever foreign investment in Africa. Anadarko sees potential for Mozambique to become one of the largest LNG suppliers in the world, and the project – expected to export the fuel to countries in Asia and Europe – will play a big part. It will be funded with $11-billion of equity and $14-billion of debt.
“Over time this project will double this country’s GDP,” Walker said at the signing ceremony in Maputo with Mozambique President Filipe Nyusi.
It’s taken the American company almost a decade to green-light the development after discovering gas in Mozambican waters in 2010. The country had to draft new regulations for its nascent oil and gas industry, even as uncertain global demand for LNG slowed plans. The government expects $95-billion of revenue over 25 years from this project and others led by Exxon Mobil and Eni.
Developing the hydrocarbon resources is crucial for the southern African nation, which has struggled to service its debt in the past. Nyusi could use Anadarko’s planned investment in the project, called Mozambique LNG, to showcase his achievements ahead of elections in October, and hope to compensate for problems with borrowings, according to Jonker.
Mozambique LNG is at the center of a new restructuring deal the government reached with a core group of Eurobond holders last month. While investors will no longer have access to future revenue from the project, the in-principle agreement allows the administration to pay a lower interest rate until after the country’s gas production begins in 2023