Investment
Mozambique: The Next Great LNG Player By Sihle Qekeleshe
Rovuma LNG Project
Mozambique is on its way to becoming a top ten liquefied natural gas (LNG) supplier. The southern African nation – which has more than 125 trillion cubic feet (tcf) of natural gas reserves – has been touted as the next great LNG player and is making full use of its potential as it looks at rivaling top African LNG producers. Mozambique’s total output is about 90,000 barrels of oil equivalent per day of natural gas and condensate from the Pande-Temane Project, an onshore gas discovery and the country’s only generating area. Anadarko and Eni are the two companies that discovered Mozambique’s potential of more than 125 tcf of natural gas reserves (75 tcf in block Area 1 and 50 tcf in Area 4) in the ultra-deepwater Rovuma Basin, however, they are not the only companies attempting exploration activities. ExxonMobil,
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Qatar Petroleum and China National Petroleum Corp (CNPC) are also competing for control over Mozambican LNG. The discoveries in Mozambique are high quality, non-associated gas reserves and mostly free of pollutants such as CO2 and H2S, making advances from a scientific point of view fairly straightforward. The Coral South Floating Liquefied Natural Gas plant in Area 4 – operated by Eni – became the first Rovuma basin plant to reach a final investment decision (FID). Field construction began in 2017 with the first gas scheduled for 2022. In 2016, the Coral South FLNG project reached an SPA for the 20-year sale of 100% of LNG supply to BP, which is expected to be sold internationally. Companies in Area 1 and Area 4 (operated by Anadarko and ExxonMobil, respectively) are progressing towards FID for onshore LNG terminals. For Rovuma LNG (Area 4), most of the LNG is contracted to buyer entities a liated to the co-venture participants (including ExxonMobil, Eni, CNPC, ENH, Kogas and Galp). For the Mozambique LNG project (Area 1), developer Anadarko has signed long-term SPAs with foreign purchasers such as PTT, CNOOC, Tokyo Gas & Centrica, BP, Pertamina and Bharat Petroleum, for a total of over 9.5 mmtpa, much of which will be sold for domestic use to Asian countries such as China, Singapore, Japan, Indonesia and India.
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