Anadarko negotiating LNG supply deal with Jera from $23bn Mozambique project

American oil and gas firm Anadarko Petroleum is in talks with Japan-based Jera for long-term supply of liquefied natural gas (LNG) from its Mozambique export scheme.

Jera, a joint venture set up by Tepco and Chubu Electric Power in April, aims to turn into the cheapest LNG buyer across East Asia.

Anadarko’s recent finds in Area 1 of Rovuma Basin in the African country will feed the initial ten million tonnes per annum (mtpa) LNG export project. Being constructed at a cost of $23bn, the project is scheduled to start by 2021.

Reuters quoted an industry source as saying: "Anadarko are in talks with Jera to discuss potential Mozambique sales."

Jera has been trying to arrange new supplies from multiple firms, details for which have not been disclosed yet.

The Japanese JV’s bulk purchasing power can ensure viability to such long-term LNG supply deals.

In 2014, Anadarko signed two-thirds of the capacity of the planned Mozambique LNG project. However, the firm required more before confirming the still-pending final investment decision for the project.

According to Anadarko spokesman John Christiansen, the project has more than 8Mtpa of LNG signed in non-binding deals, up on 2014 levels.

Christiansen was quoted by Reuters as saying: "We are progressing to long-term SPAs (sales and purchase agreements) with multiple customers in Asian markets, and we continue to make good progress with our marketing efforts."

The US-based firm had also signed a non-binding agreement with Japanese Toho Gas in 2014 for supplying 300,000tpa of Mozambican LNG.