Mozambique stealing the show as Shell, Eni mulls GTL plants

Boasting huge natural gas reserves on the back of recent discoveries, Mozambique continues to  hold allure for foreign investors  who are poised to monetise the resources through gas-to-liquids (GTL) production.

Major energy companies including South African-based Sasol, Italian Eni and oil giant Shell are looking to build GTL plants in the country.

Since 2010, there have been a series of natural gas discoveries in the offshore Rovuma Basin that are large enough to support liquefied natural gas (LNG) projects, with the United States-based Anadarko and Eni have led exploration activities in the area, said Energy Information Administration (EIA), the statistical arm of US Energy Department.

In March this year, Anadarko Petroleum, the primary operator of Mozambique’s Rovuma Offshore Area 1, which is estimated to hold more than 65 trillion cubic feet of natural gas, said it had sold two-thirds of the capacity of its planned Mozambique LNG project to Asian customers and hopes to have the rest sold soon.

In what is the first significant attempt at a GTL plant in Mozambique, Sasol, one of the world’s largest GTL operators, is teaming with Eni and Mozambique’s state-run energy company Empresa Nacional de Hidrocarburos (ENH) to study the viability of building a large GTL facility in the gas-rich East African nation.

The plant would service the gas fields off Mozambique’s northern coast in the deepwater Rovuma Basin being developed by Eni and Anadarko Petroleum which could contain 35 to 65 trillion cubic feet of recoverable natural gas.

Also, oil giant Shell and ENH last Tuesday signed a memorandum of understanding (MoU), kicking-off a feasibility study for a potential GTL facility that will use domestic gas to cater to the East African country’s fuel demand.

The agreement was part of ENH’s efforts to become a prominent and integrated hydrocarbon company, operating in Mozambique and in other countries, Nelson Ocuane, ENH chairman was quoted to have said  after the signing the memorandum.

“Our mission is to add value to the country’s natural resources, and a GTL project is an adequate response, since it allows the development of the gas chain in a cascade, with the production of diesel, synthetic fuels, and polyethylene, among other derivatives, in one and the same plant,” he said.

The signing of the MoU was preceded by the signing of an agreement for a joint study to identify areas of high hydrocarbon potential in Mozambique.

Eni has found about 75 trillion cubic feet of gas offshore of Mozambique in a block known as Area 4 of the Rovuma Basin, the site of the biggest gas discoveries in a decade. The country may have 250 trillion cubic feet of reserves, according to EHN.

FEMI ASU