Eni SpA (E - Free Report) recently announced that it has received approval from its board of directors for investment in the first phase of the Coral discovery (Coral South project).
The Coral discovery is located in the deep waters of the Rovuma Basin (Area 4), offshore Mozambique. The project development plan was approved by Mozambique authorities in February.
The project includes the construction of six subsea wells linked to a floating production facility FLNG (Floating Liquefied Natural Gas), with a liquefaction capacity of above 3.3 million tons of liquefied natural gas (LNG) per year, which is equivalent to about 5 billion cubic meters.
This project emphasizes Eni’s technological leadership in the development of deepwater gas fields using FLNG facilities.
Discovered in May 2012 and outlined in 2013, the Coral field is located within Area 4 and contains about 450 billion cubic meters (16 TCF) of gas in place.
In October, an agreement was inked by Eni and its Area 4 partners with BP plc (BP - Free Report) regarding the sale of the entire volumes of LNG produced by the FNLG Coral South, for a period of over two decades. This agreement was the first ever to be inked in Mozambique for the sale of LNG produced in the country. The deal was also the first major step toward the development of the 2400 billion cubic meters (85 TCF) of gas discovered in Area 4.
The aforesaid approval by Eni’s board is another fundamental step toward the Final Investment Decision on the project, which will become effective once all Area 4 partners have sanctioned the decision and the project financing (currently being finalized) has been underwritten.
Eni, the operator of Area 4, owns a 50% indirect interest through Eni East Africa (EEA), which holds a 70% stake in Area 4. The other Concessionaires are Galp Energia, KOGAS and Empresa Nacional de Hidrocarbonetos (ENH), holding a stake of 10% each. CNPC owns a 20% indirect interest in Area 4 through Eni East Africa.
Eni currently has a Zacks Rank #3 (Hold). Some better-ranked players from the same sector are SunCoke Energy Inc. (SXC - Free Report) and Futurefuel Corp. . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke Energy posted a positive earnings surprise of 177.78% in the preceding quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Futurefuel Corp. posted a positive earnings surprise of 20.83% in the preceding quarter. It reported a positive earnings surprise in all of the four preceding quarters.
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