The Ministry of Knowledge Economy (MKE) and Korea Gas Corp. (KOGAS) announced recently that a large gas deposit was found in the Area 4 Mining District in the Northern Sea off Mozambique on Aug. 1.

The announcement said the gas deposit would contain some 2.3 billion tons of gas in the 5th exploration well (Mamba NE-2) in the Area 4 Mining District. KOGAS started the exploration of the mining area in June and went down as far as 5,365 meters in depth to find the 200-meter-thick gas deposit, which is located some 60 km off the coast of Mozambique, about 23 km from the well where the first gas deposit was found and about 9 km from Mamba North East-1 where the third gas deposit was found in October 2011.

KOGAS said total gas deposits in the Mamba NE-2 district would amount to some 1.4 billion tons altogether, as 22.5 Tcf was found in 2011 and an additional 39.5 Tcf this year, bringing the total discovery to 62 Tcf. KOGAS plans to tap four additional wells this year and expects a boost in total discoveries at the Mamba NE2 to 70 Tcf when explorations are concluded. The 1.4 billion tons of gas discovered so far in the mining area would be enough to take care of the total natural gas needs in Korea for four years, KOGAS estimated.

If the gas discovered at Area 4 mining district and that found in the nearby Area 1 mining district are combined, the total would be around 120 Tcf, which is second only to the Persian Gulf, the largest in the world, which includes gas deposits in Iran estimated at 1,045 Tcf and Qatar at 894 Tcf.

In connection with the gas discovery, Prime Minister Kim Hwang-sik flew to Mozambique in July and met with President Guebuza and Prime Minister Aly and got their agreement to give Korean firms the rights to build the LNG plants and take charge of the sale of LNG worldwide. Further detailed discussions on the matter were scheduled to be held in Seoul when Minerals Minister Esperenca Laurinda Blas holds talks with Minister Hong Suk-woo of the MKE and President Choo Kang-soo of KOGAS.

A consortium of ENI of Italy, KOGAS, ENH, and Galp of Portugal has the right to explore gas in the Rovuna region of northern Mozambique for 38 years from February 2007 to January 2045. ENI holds a 70 percent stake in the consortium with other partners splitting the 30 percent interest in the exploration rights equally at 10 percent each.

KOGAS is currently engaged in drilling five gas fields overseas, the exploration of natural resources totaling nine projects, and three LNG production projects. In 2009, the company won the rights to develop the Zubayr oil field in Iraq in an international bidding followed by the rights for the Akas oil field in Iraq, the seventh largest oil field in the world, again in an international bidding beating some of the world-famous oil majors.

KOGAS, for the first time, has been engaged in the management of an oil field, winning global acclaim as a globally competitive gas firm in the areas of E and P.  KOGAS is also counting heavily on a large gas field found in the 4th mining district in the sea off the northern part of Mozambique in October last year and February this year.

KOGAS holds a 10 percent stake in the mining district, which will give the Korean company the possibility to secure 90 million tons of natural gas from the gas field annually with the mining district set to drill four more test sites this year.