Portuguese energy company Galp has officially exited its upstream operations in Mozambique, selling its stake in the country’s Area 4 LNG assets to XRG P.J.S.C., a subsidiary of the Abu Dhabi National Oil Company (ADNOC). The deal, valued at $881 million, marks a significant development in the region’s growing liquefied natural gas (LNG) sector and underscores ADNOC’s global ambitions in the natural gas space.

The agreement covers Galp’s participation in several key projects, most notably the Coral South FLNG, which became operational in 2022. This project is Africa’s first deepwater floating LNG facility and has already been shipping LNG from offshore Mozambique. The sale also includes Galp’s stakes in two major future developments: Coral North FLNG and the Rovuma LNG onshore project, both of which are currently in the planning phase and targeting final investment decisions (FIDs) in 2024 or 2025.

Galp confirmed that the $881 million transaction price includes the equity value of the assets, the repayment of associated loans, and additional investments made after December 31, 2023. As of that date, the assets held $525 million in lease liabilities, further highlighting the scale and complexity of the investment.

The agreement also outlines two contingent milestone payments, reflecting the long-term nature and risk profile of LNG megaprojects:

• A $100 million payment upon Coral North reaching FID

• A further $400 million payment once Rovuma LNG secures FID

This staged payment structure is closely aligned with the typical development cycle of LNG projects and demonstrates ADNOC’s strategic approach to risk management while continuing to build its international LNG portfolio. For ADNOC, this acquisition strengthens its presence in one of the most promising gas regions globally, in line with its broader objective to expand into high-growth energy markets amid rising global demand for natural gas.

Mozambique’s Area 4, operated by Italian energy giant Eni, remains one of the largest and most promising untapped gas reserves in the world. With Coral South already in operation and additional projects in the pipeline, the area is emerging as a significant LNG hub for Africa, attracting interest from global energy majors.

While Galp has exited its upstream position in Mozambique, the company emphasized that it remains committed to optimizing its global portfolio and pursuing opportunities that align with its energy transition strategy. The sale highlights Mozambique’s increasing importance in the global LNG landscape and solidifies its role as a key player in the future of energy.