October 20, 2011 7:22 pm

Eni finds its largest natural gas field

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Eni, the Italian oil company, has made the biggest natural gas discovery in its history, locating 15-20 trillion cu ft of new resources off the coast of Mozambique.

Paolo Scaroni, chief executive, said the Mamba South 1 well had not reached target depth and would be drilled for another 500m.

“It is possible this number of 15-20 tcf might grow. We don’t know yet, but every indication is in that direction,” he said, adding that three further wells would then be drilled.

The discovery, made in “Area 4” located 40km offshore, showed that “Mozambique will become another province of gas”, Mr Scaroni said. “I don’t go as far as saying another Qatar, but something extremely relevant.”

Interest in the east African coast as a new frontier for gas production has increased since last year, when Anadarko and Cove made a large discovery off the Mozambique coast. BG Group then scored successes further north in the Indian Ocean waters off neighbouring Tanzania.

Eni said that 212 metres of “continuous gas” was found in its discovery well. Mr Scaroni said the company would proceed to develop the field and first gas production was possible in 2016. He cautioned that the estimate for the size of the discovery referred only to resources, not proved reserves.

Mozambique’s location on the Indian Ocean, and a large port at the capital, Maputo, makes the country ideally suited to supplying liquefied natural gas to Asian buyers, according to Mr Scaroni. “Mozambique is very well placed to serve the Pacific market – India, China, Thailand – which is the region where consumption of gas is growing most rapidly and prices are highest,” he said.

The amount of gas discovered “might justify” the construction of “up to three” liquefier plants in Mozambique, Mr Scaroni added. Each would require investment of some $5bn.

Mozambique, a former Portuguese colony that endured three decades of civil war until 1992, ranks as one of the poorest countries in the world. It has no oil and only a very small amount of gas production.

Mr Scaroni said that some of the newly discovered gas would be used for domestic electricity generation. He would soon visit the country to discuss with the government how best to use the resource. “We think this will be helpful to the economy of Mozambique. All our activity is being supported by the government,” Mr Scaroni said.

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