UAE’s Adnoc to buy Galp’s stake in Mozambique LNG project

The United Arab Emirates’ main oil company agreed to buy a 10% stake in a natural gas project in Mozambique, its second major deal this week as it seeks to expand the business globally.

Abu Dhabi National Oil Co. will purchase the stake in the Area 4 concession from Galp Energia SGPS SA, it said in a statement Wednesday. Galp will receive $650 million, and further contingent payments of as much as $500 million when two planned development phases go ahead, the Portugese company said in a separate statement.

The agreement gives Adnoc a share of LNG supply, a fuel that it’s betting on for future growth. The company is also scouring the world for deals, including the takeover of German chemical company Covestro AG and the merger of one of its units with a subsidiary of Austria’s OMV AG to create a $30 billion petrochemical giant. That push coincides with Saudi Aramco’s efforts to boost its global presence, after agreeing to buy an LNG company in Australia.

In Mozambique, Adnoc will get a share in the 3.5 million-ton-a-year Coral South development LNG export project that is currently in operation. A proposed expansion called Coral North could produce the same amount of fuel from a floating export vessel. Another project planned to be based onshore called Rovuma is projected to have capacity to produce 18 million tons of LNG a year.

It follows Adnoc’s first acquisition in the US earlier this week when it picked up a share in NextDecade Corp.’s LNG project in Texas, along with supply from a planned expansion of the plant.

The deal into Mozambique where attacks by militant groups linked with Islamic State have ramped up near the project site is also the latest example of the UAE’s move to boost its influence in Africa. Earlier this year, the country agreed to invest $35 billion in Egypt, potentially saving the economy.

Source: energyvoice

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