Anadarko out to overcome challenge

Andrew Seck, Anadarko’s recently appointed liquefied natural gas vice president, admitted to delegates at CWC’s Gas Summit in Maputo that the current LNG market conditions present a major challenge for the company’s Mozambique LNG project.

“It’s a tough time to bring a project to market — there is no easy way around it. As I took on this burden of leading the marketing effort I was very well aware of the weight on my shoulders to try to find a way through (to a final investment decision),” he said.

Seck said core markets are over-supplied, while competition is fierce between portfolio players and existing projects with spare capacity. As a result, new LNG buyers are being sought, thus creating a different risk profile while the volumes demanded are variable and smaller.

Seck said buyers are in a strong position and want flexibility in terms of price, delivery points, terms and indices, but stressed that “buyers must realise upstream sponsors have to have an adequate return on investment so finding that balance in negotiations will probably make my life difficult in the next little while”.

Despite these challenges, Seck expects the LNG market to come into balance between 2022 and 2023, when “Mozambique will have the opportunity to position itself as a great driving force and new player in this sector”.