The board of Italy's Eni has approved the investment for the first phase of the development of the Coral floating LNG facility off Mozambique, a key step ahead of final investment decision on the project.
There has been much speculation over the Coral LNG project and whether it would move forward given the industry downturn and low LNG prices globally.
But Eni said approval by its board of the investment moved the project -- based on the 450 Bcm of resources in the Coral field in Area 4 -- closer to FID.
"The approval of this investment by Eni's board is another fundamental step towards FID on the project, which will turn effective once all Area 4 partners have approved it and the project financing, which is currently being finalized, has been underwritten," Eni said.
The project received a boost last month when Eni and its Area 4 partners signed an agreement with BP for the sale of the entire volumes of LNG produced by the floating Coral LNG project for over 20 years.
"This was the first agreement ever signed in Mozambique for the sale of LNG produced in the country," Eni said.
The FLNG facility will have a capacity of over 3.3 million mt/year, equivalent to some 5 Bcm/year.
Eni is the operator of Area 4 with a 50% indirect interest owned through Eni East Africa (EEA), which holds a 70% stake in Area 4.
The other partners are Portugal's Galp Energia, South Korea's Kogas and state company ENH each with a 10% stake.
CNPC owns a 20% indirect interest in Area 4 through Eni East Africa.
