$30 billion investment for 2018 LNG exports startup

More than $30 billion will be invested initially in Mozambique’s natural gas sector to build capacity to produce 20 million tonnes per year of liquefied natural gas (LNG), with the first exports due to start in 2018, the national oil company said.

The investments will be made to develop the northern ports of Pemba and Palma, where a giant logistics base and LNG production plants are planned that will use gas produced from offshore fields in the Rovuma Basin being developed by US oil major Anadarko Petroleum Corp and Italy’s Eni.

Mozambique is hoping revenues from its large gas deposits and its fledgling coal mining industry will help it emerge from years of poverty and dependence on foreign donors.

The initial exports from 2018 will come from a first LNG train of 5 million tonnes a year, with overall capacity for the industry to be ramped up subsequently to 20 million tonnes per year.

Mozambique’s parliament recently approved amended legislation for the gas and oil sector, including a “special regime” for LNG development in Rovuma Basin Areas 1 and 4 where Anadarko and Eni are operating. This covered the construction and operation of LNG facilities and related activities.

Some industry analysts say Mozambique may struggle to meet its target date of 2018 for the start of LNG exports. 

They say it must develop its LNG potential by the end of this decade as other supplies come on the market from West and East Africa and the global supply/demand scenario shifts, with the United States moving from energy importer to exporter.

Around 180 trillion cubic feet of gas has been found in Mozambique’s offshore Rovuma Basin. This would be enough to supply Germany, Britain, France and Italy for 18 years.