Eni SpA said it will be “very challenging” for Mozambique, its planned base for African output, to meet a 2018 deadline to build plants allowing the country to ship liquefied natural gas.
“We’re working hard to reach” a final investment decision “as soon as we can,” Luca Bertelli, executive vice president of exploration at the Rome-based company, said in an interview. Completion by 2018 is “very challenging,” he said. “There’s no infrastructure, no logistics so it will take a bit of time.”
Eni plans to spend $28 billion on African development over four years with average annual growth in output of 3.2 percent, Bertelli said in a Cape Town presentation. The company plans to invest $3.5 billion in exploration in the period, drilling 140 wells, and achieve a new-resource unit cost of $1.20 a barrel.
Eni has found 75 trillion cubic feet of gas in the offshore fields of its Area 4, more than the current reserves of Norway. Mozambique plans to build four LNG units with total capacity of 20 million metric tons a year by 2018, making it the largest LNG export site after Ras Laffan in Qatar. It may cost $20 billion.
“Mozambique will be the base for production in the next decades,” Bertelli said. “I was part of Angola LNG but there they start with some logistics in place to build the plant.”
Eni stock was little changed at 17.75 euros by the close in Milan, valuing Italy’s biggest oil company at about $88 billion.