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First cargo from Angola LNG bound for Brazil's Guanabara Bay

17 Jun 2013 09:48:07 | glm

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The long-delayed Angola LNG project has loaded its first cargo, with the volumes en route to Brazil, the project venture said in a statement on 16 June.

Angola LNG confirmed that the cargo had been sold to state-owned oil and gas company Sonangol, who in turn is delivering the cargo on the 160,000 cubic metre (cbm) Sonangol Sambizanga to Brazil's state-owned energy company Petrobras.

The vessel is expected to berth at Petrobras' Guanabara Bay floating storage and regasification unit (FSRU) on 26 June, according to ship-tracking data.

Sonangol, a 22.8% shareholder in Angola LNG, had been widely expected to deliver the symbolic first cargo from Angola LNG to a Lusophone country. Given the uncertainty over the timing and quality of the initial cargo from the project, the Angolan company was understood to have options in place with a number of potential buyers, including Petrobras and Portugal's Galp Energia.

The 5.2mtpa Angolan project which will also produce 63,000 bbl/day of natural gas liquids for export and 125,000 million cubic feet (MMcf)/day for the domestic market - will now be taken off line for US engineering contractor Bechtel to conduct tests before the facility is restarted and commercial control is handed back to Angola LNG.

Angola LNG did not provide details on the duration of the tests or timing of the planned restart. However, market sources close to the consortium said that in the absence of any technical issues, the shutdown period could last between two and six weeks.

California-headquartered major producer Chevron, which is the project operator with a 36.4% stake, started the facility's commissioning in late 2011, but a series of technical issues within the $10bn project hampered its start-up by 18 months.

Originally, the main market for Angola LNG was the US and specifically, the 3 billion cubic feet (bcf)/day capacity Gulf LNG import terminal at Pascagoula in Mississippi.

However, the consortium was forced to revise its marketing strategy in the wake of the shale gas revolution in North America.

As part of its new strategy, the consortium confirmed that it has signed a number of master sales and purchase agreements (MSAs), thus "providing Angola LNG with a robust and diverse portfolio of customers".

Further agreements are currently being negotiated, Angola LNG added.

The project consortium has indicated that it will initially seek to market the volumes from the plant on a spot and short-term basis, including FOB (free on board) tenders.

However, Angola LNG is also understood to have advanced negotiations for mid- and longer-term contracts.

Other Angola LNG shareholders include French oil giant Total, UK-based major supplier BP and Italy's Eni, who hold a 13.6% interest each in the project.

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