First production from the huge Rovuma liquefied natural gas project in Mozambique has been pushed back one year to 2025 following a decision by the partners to delay a final investment decision from this year to 2020.

Confirmation of the delay emerged on 8 October when — in a ceremony in Maputo attended by President Filipe Nyusi — the JFT consortium of JGC, Fluor and TechnipFMC was awarded a multi-billion-dollar engineering, procurement and construction contract covering the two initial liquefaction trains.

The contract award — which includes facilities associated with the LNG trains — and final investment decision delay both confirmed earlier Upstream reports.

It is unclear what lies behind the sanction delay, but one source suggested it was caused by an unspecified eleventh-hour request or demand from the Mozambican government.

However, some observers believe it may partly relate to financing having to be finalised — the Export-Import Bank of the US is assessing making a loan to Rovuma LNG.

Upstream was told the project, with a total initial capacity of 15.2 million tonnes per annum, will now be sanctioned towards the end of the first quarter of 2020 or early in the second quarter.

Mozambique’s oil and gas regulator, the National Petroleum Institute (INP), said the Rovuma LNG project has a price tag of $23.6 billion, with “first gas production… scheduled for 2025”. The INP added that the partners in Area 4 (which holds the feedstock gas for Rovuma LNG) “made a commitment to continue investing in activities related to the project until the final investment decision, to be announced in 2020”.

President Nyusi — who will contest general elections on 15 November — said sanction will be announced “in the first half of next year". Up until sanction, the JFT partners will focus on setting up a pioneer construction camp, continuing resettlement activities, airstrip and access roads as well as the start of detailed engineering of the LNG facilities.

Speaking at the EPC signing ceremony, Nyusi said the project foresees the creation of 5000 jobs during the construction phase and 1500 in the operations phase. He said Mozambicans need to be trained, with the support of the concessionaires, to actively participate in the development of the resource.

Also at the ceremony, ExxonMobil’s head of power and gas marketing, Peter Clarke, said: “The Area 4 partners will advance midstream and upstream area project activities of more than $500 million as initial investments".

Area 4 is operated by the Mozambique Rovuma Venture — whose partners are Eni, ExxonMobil and China National Petroleum Corporation — which has a 70% interest in the offshore asset.

The remaining partners are Portugal’s Galp Energia, Kogas of South Korea and state-owned ENH, each with 10% stakes. Galp said the EPC award will allow midstream and upstream early project activities to start, adding that the government has approved the project’s LNG sales and purchase agreements.

ExxonMobil is leading construction and operation of liquefaction and related facilities, while Eni is responsible for the upstream facilities.

A joint venture of Saipem and Subsea 7 is frontrunner to land a contract to provide the subsea hardware for developing 15 trillion cubic feet of feedstock gas in the Mamba field in Area 4.

As part of its EPC contract, the JFT consortium was issued with a limited notice to proceed, ahead of next year’s sanction.

JGC said the consortium was selected because of its “capabilities in health and safety management, competitive financial strength, technical design, execution planning, contract price and schedule”.

Mark Fields, group president of Fluor’s energy and chemicals business, said: “Fluor is pleased to have been selected for this strategic development and to partner with a team that combines considerable LNG expertise and design build capabilities on the African continent.”

TechnipFMC’s onshore-offshore president Nello Uccelletti added: “This award confirms the market recognition of TechnipFMC’s expertise and track record in gas monetisation and, in particular, in the LNG industry. It also reinforces the company’s positioning in the energy transition journey.”

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Rovuma LNG start-up delayed until 2025