Eni SpA's dependence on oil and gas fields in Africa is shown by the payments - including royalties, taxes, fees and production entitlements - made to governments on the continent past year.
Eni-led development finally gets the go ahead in what will be the first of its kind in Africa.
The Coral South FLNG Project is for KOGAS to construct an FLNG in the Coral South area of Mozambique's marine gas field (Area 4) jointly with Eni of Italy, CNPC of China, GALP of Portugal and ENH of Mozambique and sell LNG for a long period.
The facility, which measures 439 meters in length, 65 meters in width, 38.5 meters in depth and weighs some 210,000 tons, will be able to produce 3 million tons of LNG and 480,000 tons of condensate annually.
Claudio Descalzi, the chief executive officer at Eni, said the project is a win-win as it capitalizes on the emerging LNG sector while delivering returns to the economy of Mozambique.
The FLNG facilities' construction will be financed through project finance covering around 60% of its entire cost.
"The only two projects we expected to be sanctioned this year, Coral and Fortuna, are both floating LNG".
"Using a vessel [to] liquefy gas offshore will allow the partners to realize cash flow from Mozambique earlier", Alasdair Reid, research manager for Southern and East Africa at Wood Mackenzie, said in a statement.
Eni had also awarded an Engineering, Procurement, Construction, Installation, Commissioning and Start-up (EPCIC) contract to TJS Consortium comprised of TechnipFMC, JGC Corporation and Samsung Heavy Industries.
The Coral FLNG unit will be used to develop the Mamba gas discovery in the Rovuma Basin, which lies about 48 km off Mozambique. "With stranded gas resources suited to FLNG elsewhere in Africa, Mozambique offers Eni an ideal regime to test this new approach". "With global activity levels and costs low, now is a good time to add new capacity, even if the LNG market does presently look oversupplied".
In March, Eni agreed to divest 50% of its stake in EEA to ExxonMobil.