UAE’s ADNOC has agreed to acquire Galp’s 10% interest in the Area 4 concession of Mozambique’s Rovuma basin in a deal worth approximately $650m.

The Area 4 concession comprises the operational Coral South floating LNG (FLNG) facility and the proposed Coral North FLNG. The planned Rovuma LNG onshore facilities are also part of the concession.

Operational since 2022, the Coral South FLNG has the capacity to produce up to 3.5 million tonnes per annum (mtpa) of LNG. The prospective Coral North and Rovuma developments are expected to be sanctioned during 2024/25.

The Coral North facility is projected to generate an additional 3.5mtpa of LNG through an FLNG facility for processing and liquefying natural gas for export.

Designed to lower the carbon intensity of the LNG it produces, the 18mtpa Rovuma onshore LNG development is said to be in line with ADNOC’s target to achieve net zero by 2045.

Through the investment in Area 4 concession, ADNOC aims to advance its efforts to expand lower-carbon LNG portfolio to address the rising gas demand. It will also help the company contribute towards energy transition.

Besides, the deal is a move to support the state-owned oil company’s international growth strategy.

ADNOC will also make additional contingent payments of $100m and $400m with the final investment decisions of Coral North and Rovuma LNG, respectively.

ADNOC low carbon solutions and international growth executive director Musabbeh Al Kaabi said: “For over fifty years, ADNOC has been a reliable and responsible global provider of LNG and we are building on this role with this landmark investment in the world-class Rovuma supergiant gas basin in Mozambique as we deliver on our international growth strategy.

“Natural gas plays an important role to meet growing global demand with lower emissions compared to other fossil fuels and this acquisition supports our efforts to build an integrated global gas business to ensure we continue providing a secure, reliable and responsible supply of natural gas.”

Subject to customary third-party approvals, the transaction is expected to be completed this year.