ENI of Italy Considers Large Gas Project in Mozambique LONDON - ENI, the Italian oil company, and its partners in Mozambique are strongly considering building a floating liquefied natural gas platform to export a portion of the gas they have discovered in the waters there. The companies will likely publish documents in the next few days soliciting interest from international contractors in the project, according to an oil industry official who asked not to be named because he was not authorized to speak publicly. Groups led by ENI and Anadarko Petroleum, the independent American producer, have made major gas discoveries in two separate blocks in the waters off Mozambique in recent years. If the oil companies succeed in exporting the gas in the quantities they have discussed, Mozambique would become one of the world's gas powers. Much of the gas, which would be supercooled and exported on ships as liquefied natural gas, is likely to go to India and other Asian countries, which are easy sailing distance from Mozambique in East Africa. Thomas Longford, a banker at UBS, which has been involved in sales of stakes in the Mozambique discoveries, said on Wednesday at the Oil and Money Conference in London that all of the gas was likely to be sold at premium oil-indexed prices. The International Herald Tribune, owned by The New York Times Co., is one of the conference's organizers. ENI and Anadarko are in the early stages of designing an onshore liquefied natural gas facility in a remote area called Afungi in Cabo Delgado Province in the northern part of Mozambique. The facility will use gas from the fields in their two blocks that are geologically connected. The onshore LNG plant is likely to be one of the largest in the world with, over time, at least 10 units, with a capacity of five million metric tons each. The potential floating operation would be a small fraction of the size, but it reflects a major new push by the industry to find cheaper and more efficient ways to produce the natural gas that is locked under the sea in remote areas. Although building the onshore facility is considered relatively simple from a technical point of view, the location in Mozambique, which until now has only had a small oil and gas industry, will create many obstacles. All of the equipment and a wide range of skilled personnel would need to be brought into the country and to the site, which is not served by roads. The resettlement of about 3,000 people living in the area would also need to be negotiated. About 10,000 workers would be on the site at the peak of the construction phase. If things go smoothly, ENI and Anadarko expect gas to begin flowing around the end of 2018. Total development costs for the drilling and onshore export facilities are estimated to be around $50 billion. A floating facility costing several billion dollars would provide ENI with an alternative export route that evades a lot of onshore hurdles. In floating LNG, the gas goes directly from the wells to the vessel, which is a very large boat bristling with processing equipment. ENI would export from the southern part of its block known as Area 4. ENI is considering a 2.5 million metric ton per year facility. ENI's partners include CNPC and GALP of Portugal. A floating plant "could offer an earlier route to initial but smaller scale monetization while the larger and more complex land site is developed," said Peter Hutton, an analyst at RBC Capital Markets in London. Perhaps the biggest advantage is that the boat and its gear could be built in a world-class shipyard, rather than in a difficult location like Mozambique. For example, Royal Dutch Shell is building such a vessel for its Prelude project off Western Australia in South Korea. Prelude is likely to be the world's first operating floating LNG facility. Shell, which wants to roll out a floating LNG vessel every year, would like to participate in Mozambique, but it has so far been unable to find a stake for sale at a price it considers reasonable. Last year, Shell was outbid for Cove Energy, which had a stake in Anadarko's area, by PTT Exploration and Production of Thailand.