Mozambique liquefied natural gas, (LNG) stands to transform the country and entrench it as a leading player in the global LNG industry. Developing these reserves and scaling up the currently planned LNG facility to its potentially multi-train capacity, will establish Mozambique as one of the largest exporters of LNG, a commodity of increasing global prominence.
Standard Bank Group estimates that developing LNG in Palma will facilitate a real GDP increase of 800% by 2035 with the Government of Mozambique receiving in excess of USD 200 billion in receipts over the life of a 6-train facility. The opportunity scale, for developers, the Government and citizens of Mozambique, as well as private participants across all sectors, is therefore enormous.
Anadarko and ENI's, together with ENH and their respective partners, world-scale discoveries will need large volumes of contracted LNG sales to underpin the sizeable offshore and onshore development requirements associated with monetising the gas.
"There is significant scope to provide gas to the local market to foster gas-based industrial development," says Simon Ashby-Rudd, Global Head Oil & Gas at Standard Bank. "This option has attracted interest from a number of players across power, fertiliser/petrochemicals and gas-to-liquids (GTL). As Mozambique develops into a global energy player, so too can it potentially become a regional energy hub providing petroleum products, chemicals and power to neighbouring countries. Regional LNG import options are developing at a rapid pace and Mozambique will also be well-positioned to serve these.
" South Africa has recently announced the procurement of approximately 3 000 MW of gas-fired power, which given SA currently has no material gas-producing assets capable of supporting such plants, will likely require LNG imports.
"A 2015 Final Investment Decision (FID) of Mozambique LNG would be a game-changing development for Mozambique and be key to unlocking future investment in the country and begin the geopolitical repositioning of Mozambique," he says. While moving gas from the Rovuma Basin to southern Mozambique is subject to its own economics and wider strategic consideration, there remains potential for gas-based development around Maputo through, for example compressed natural gas, (CNG), in the short-term or a dedicated pipeline in the longer term. Such developments could facilitate industrial development around Maputo, as well as meet South Africa's energy shortfall and generate additional revenue streams. These would of course be subject to other power/petrochemical/GTL developments further north and continued progress on the rolling out of further LNG trains over the next decade.
Mr Ashby-Rudd notes that gas-based industrialisation leveraging multiple LNG train developments has underpinned the economic growth of Qatar, Oman, and Trinidad and Tobago. While there is large potential for this to be replicated in Mozambique, outstanding items still remain in realising such an opportunity. These include:
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