Anadarko Petroleum Corp. continues to progress its proposed natural gas export project in Mozambique and expects to wrap up sales and purchase agreements (SPA) this year, company executives said Wednesday.

Earlier this year, the Houston producer said it had secured half of the needed offtake contracts for the project, to be sited offshore East Africa. During the first quarter, the Mozambique government approved the Golfinho/Atum development plan with Area 1 participants.

Anadarko is working with Asia-Pacific partners to advance liquefied natural gas (LNG) exports from the near-shore region, initially known as Offshore Area 1. A heads of agreement (HOA) was reached late last year with Tohoku Electric Power Co. Inc., bringing into the project one of Japan’s leading LNG buyers.

During a conference call to discuss first quarter results, the management team was quizzed about the project’s progress and whether a final investment decision (FID) is in sight.

“In general, the HOA is sort of like an engagement to be married, and the sales and purchase agreement is the actual marriage itself,” said CEO Al Walker. Anadarko is moving from “engagement to getting married,” but the date hasn’t yet been set.

Executive Vice President Mitchell Ingram, who is in charge of international and deepwater operations and project management, offered more insight about where the project stands in the queue.

“Obviously, we reached our near-term target…with multiple buyers on volume and price,” Ingram said. Anadarko is going through the process to get the sales and purchasing agreements (SPA) concluded, “which we anticipate doing this year…It does take some time for those agreements to be in place…

“In parallel to that, there are just lots of other activities ongoing.”

Among other things, Anadarko has begun resettling residents living in the development area, a project that is on time and on plan, Ingram said.

Pricing for the onshore infrastructure of the project also is under review, “and we’re getting close to concluding with the contractor for the offshore scope,” he said.

A number of “parallel paths” are going to define the total capital expenditures. Once the SPAs are in place, the final process involves project financing. Lng-term SPAs from creditworthy gas buyers ensure a lender that the project’s revenues are sufficient to repay the debt obligations.

“Once we’ve got all of those SPAs aligned, then we’ll be in a position to take FID,” Ingram said.

While U.S. LNG projects often are linked to the Henry Hub, Asian buyers have traditionally linked their gas purchases to the oil index.

The Mozambique contracts are oil-linked, and “there is a number of different slopes” in the contracts, Ingram said.

Asian oil-linked contracts traditionally are written to allow “S-Curves,” which give the buyers a flatter slope at higher oil prices, while developers prefer a flatter slope at lower oil prices to ensure the economics are achieved.

In many S-curved, oil-linked contracts for LNG, the price slope is applied within a range of prices, such as $40-100/bbl.

Anadarko has not disclosed what the price slopes are, but the company is able to be “more flexible in terms of the oil slope and basically different gearing,” Ingram said. “So there is a mix of different contracts we’ve got in place, and that’s allowing us to have that flexibility with the buyers we’re dealing with some of the time.”

Each of the LNG buyers “have their own books they are trying to manage,” Walker added. Pricing contracts have changed “as people have looked to balance their books…A lot of people moved to get their books balanced in the way they can trade around them.”