June 18 2019 was a historic day for Mozambique. A consortium of international companies, led by Texas-headquartered Anadarko Petroleum, took the final investment decision on the US$23 billion Mozambique LNG project, the largest sanction ever in sub-Saharan Africa oil and gas. Described by His Excellency President Nyusi as “one of the most important and transformational projects in the country’s history”, Mozambique LNG is set to be a game-changer for this East African nation of nearly 30 million people.
This is a project a decade in the making. The first drillship arrived in Anadarko’s Offshore Area 1 Block in November 2010 to drill the Windjammer wildcat some 40 km offshore in waters almost a mile deep. After this success, the discoveries kept coming, and coming. To date, approximately 75 trillion cubic feet of recoverable gas has been discovered, the equivalent of a 12-billion-barrel oilfield, with the reservoirs delivering impressive flow rates.
The gas will be piped to shore for liquefaction at a two-train LNG facility with nameplate capacity of 12.88 million tonnes per annum (tpa). The LNG will be loaded onto ships for export, leveraging Mozambique’s geographic advantage when it comes to supplying gas-hungry markets in Asia.
President Nyusi was right to call this deal transformational. According to Wood Mac, from the early 2030s state revenue from Mozambique LNG alone will reach US$3 billion per annum, single-handedly doubling today’s revenue as calculated by the IMF and World Bank.
And this is not the only mega-LNG project on the drawing board. ExxonMobil’s Rovuma LNG project, which envisages a 15.2 million tpa two-train facility taking gas from its offshore area 4 block, is also lined up to take FID later this year. Meanwhile, Italy’s ENI is already moving ahead with its 3.4 million tpa floating LNG facility, which will draw on 5 TCF of gas in waters more than 2,000 metres deep with first gas due in mid-2022.
“With strong LNG demand growth out of Asia, now is Mozambique’s time,” said Jon Lawrence, an analyst with Wood Mackenzie’s sub-Saharan Africa upstream team, as news broke of the Anadarko FID.
Anadarko’s chief executive Al Walker expects the project to double the country’s GDP over time. This would allow the country to re-establish credibility with lenders, improve long-term economic outlook, capacity build for the future and accelerate poverty reduction – according to World Bank research, of the population of 30 million, the proportion living in poverty has fallen in recent years from 59 per cent to 48 per cent, which is good news but still leaves plenty of scope to do more. The big hope is that the opportunities that arise from these LNG mega-projects, both in terms of inward investment, jobs and government tax receipts as well as social and community funding from the international partners, will fast-track this process for the benefit of all.
It makes this the ideal time to participate at the 6th Mozambique Gas Summit & Exhibition, to be held in partnership with ENH on 13-14 November in Maputo. With FID reached on Coral South FLNG in 2017, now on Mozambique LNG 2019 and with ExxonMobil’s project close to sanction, this is the time to hear from key decision-makers in this fast-emerging LNG hotspot. Key Government figures and policy-makers are confirmed to attend and speak at the event, with plenty of opportunities to network with key suppliers, contractors and those heading up the gas companies’ national content programmes, designed to build a sustainable homegrown oil and gas base in the country.