The two companies will drill the Rovuma Basin reservoirs in Anadarko’s Area 1 and Eni’s Area 4 in a “separate but coordinated manner” targeting a combined 24 trillion cubic feet of gas.

Anadarko executive vice president of global LNG Mitch Ingram said the company had already made good progress in Area 1, but the agreement with Eni will allow the two companies to pursue development options more efficiently and capitalise on greater economies of scale. The unitisation and unit operating agreement (UUOA) will allow for the development of the massive natural gas resources that straddle Area 1 and Area 4.

“We appreciate the cooperation of the government of Mozambique, Eni and our co-venturers in Offshore Area 1 for their collaborative efforts in achieving this UUOA, which is fair, equitable and consistent with best industry practices,” Ingram said.

“We have already made tremendous progress advancing the natural gas resources in the Golfinho and Atum fields that are fully contained within our block, and with this UUOA, we can also expect to move the Prosperidade and Mamba straddling reservoirs forward more efficiently, while capitalising on greater economies of scale.”

Under the terms of the agreement, Prosperidade and Mamba will be developed to a point where 12Tcf has been defined in each area. 

All subsequent development of the unit will be pursued jointly by the Area 1 and Area 4 concessions through a joint-venture operation split equally between Anadarko and Eni. It meant there was a considerable incentive to fast-track the developments.

“The UUOA, developed in close collaboration with the 11 concessionaires, represents a fair agreement for all parties involved in the two areas,” Eni said in a statement.

The agreement is subject to final approval by the Mozambique government.

In addition, Anadarko reached a memorandum of understanding with the government to provide natural gas from its Mozambique LNG development for domestic use.

Under the terms of the MOU, Offshore Area 1 will provide initial volumes of some 50 million cubic feet per day from each of the two proposed onshore trains for use in the country.

The gas will be provided at pricing that is fair to all parties and supports local natural gas development. It includes provision for up to 300MMcfpd in future years as projects are matured and commercial terms agreed.

“Signing this MOU is an important step,” Ingram said. 

“We look forward to continuing to work with the government of Mozambique to finalise the legal and contractual framework that will enable us to deliver natural gas for domestic projects and LNG cargoes for export to premium markets around the world, both of which will benefit Mozambique through a reliable source of cleaner energy and significant revenue generation.”

Anadarko is the operator of the Offshore Area 1 Block with a 26.5% interest alongside Mitsui (15%), Mozambique’s national oiler Empresa Nacional de Hidrocarbonetos (15%), Bharat PetroResources (10%), ONGC Videsh (10%), PTTEP (8.5%) and Beas Rovuma Energy (10%), a joint venture between India’s OVL and Oil India.

Eni operates Area 4 (50%) with CNPC (20%), Galp Energia (10%), Kogas (10%), and ENH (10%). First LNG exports are being targeted for 2018 from the onshore plant, while Eni is pursuing a FLNG option.