This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/16/2019

Overview
Mozambique’s current natural gas production is operated by Sasol (South Africa) in Inhambane Province, which holds proven reserves of 2.6 trillion cubic feet (TCF).  The natural gas is produced and processed at a central facility in Temane and then transported via an 865 km pipeline to South Africa, with a link to southern Mozambique for domestic use.  Additionally, Sasol will develop an integrated oil and liquefied petroleum gas project adjacent to its existing petroleum facility.  The project includes 13 wells and an LPG production facility at an estimated cost of USD1.4 billion.

Due to the discovery of over 180 tcf of natural gas reserves in the Rovuma basin by Texas-based Anadarko (Area 1) and Italian firm ENI (Area 4), Mozambique is expected to become a major exporter by 2023.  Anadarko will build an LNG plant to process the gas they discovered in Area 1, off the northern coast of Mozambique near the border with Tanzania.  It selected a joint venture of developers that includes McDermott (USA), Saipem (Italy) and Chiyoda (Japan) to construct the Afungi LNG Park valued at USD 25-30 billion.  Anadarko expects to conclude several sales and purchase agreements (SPA) by year-end for liquefied natural gas (LNG) and they announced their final investment decision in June 2019 in the amount of USD 25 billion during the recent US-Africa Doing Business Summit Conference. This is a major investment for Mozambique and the first of such value in the entire African continent.

On June 1, 2017, ENI announced the final investment decision amounting to USD 8 billion for the construction of six subsea wells connected to a Floating Liquified Natural Gas (FLNG) production facility in Area 4, which is due for completion in mid-2022.  The Engineering Procurement and Construction (EPC) contract was officially awarded to a consortium composed of TechnipFMC, JGC, and Samsung Heavy Industries.  Furthermore, in 2018, ExxonMobil  acquired from ENI a 25% indirect interest in the Area 4 block.  As part of this agreement, ENI will lead all upstream operations, and ExxonMobil will lead the construction and operation of liquefaction facilities onshore to be located in the Afungi LNG Park. 

Mozambique’s National Petroleum Institute has awarded four concessions for petroleum exploration and production in offshore blocks in the Angoche and Zambezi Basins and in onshore blocks in the Mozambique Basin to four separate consortiums led by ExxonMobil, Sasol, ENI, and Delonex Energy (U.K.).  However, none of the operators have started exploration or production activities, as agreements are still under negotiation with the government.  

Empresa Nacional de Hidrocarbonetos (ENH), the state-owned hydrocarbon company, represents the Mozambican Government in petroleum operations.  The law stipulates that ENH participate as a stakeholder in petroleum production operations, as well as exploration projects.  ENH is also engaged in other national flagship projects, such as the oil and gas terminal expansion in the Port of Pemba, and the urbanization of the district of Palma, where the Area 1 and 4 natural gas business activities will be concentrated.  In partnership with the Korean gas company Kogas, ENH is also operating a gas distribution network to provide households and industry with piped gas in the south of Mozambique.

The Government of Mozambique has determined that a portion of the Rovuma Basin natural gas production should be used locally to address the needs of the domestic market, and the Ministry of Mineral Resources and Energy launched a tender to identify companies interested in developing industrial projects to use the gas.  Norway’s Yara International was granted an allocation of 80-90 mcf/d of gas to produce 1.2-1.3m t/yr of fertilizers.  Additionally, Royal Dutch Shell’s Gas to Liquid (GTL) project will produce 38m b/d of liquid fuels such as diesel, naphtha, and kerosene. Finally, a Kenyan group, GLA, was awarded a concession to build a 250MW power plant.  There is uncertainty as to whether the off-take to which the government is entitled will be sufficient to provide natural gas to all three projects during the first phase of operations.

Leading Sub-Sectors

  • Engineering and steel structure fabrication services
  • Oil & Gas machinery and services
  • Oil & Gas drilling machinery and equipment
  • Maritime security equipment and services
  • Safety and security equipment and services
Opportunities
For the next five years, opportunities for U.S. equipment suppliers will be driven by the construction of Anadarko’s LNG plant, ENI’s FLNG plant, and ExxonMobil’s LNG plant.  The LNG development plan includes two 180,000 cubic meter LNG storage tanks, condensate storage, a multi-berth marine jetty, and associated utilities and infrastructure.  ENI’s development plan foresees the drilling and completion of six subsea wells in addition to the construction and installation of a advanced technology FLNG with a future onshore liquefaction facility.  ExxonMobil’s development plan includes the construction of two liquefied natural gas trains which will each have the capacity to produce 7.6 million tons of LNG per year and related facilities.

Web Resources
National Institute of Petroleum (INP)
National Directorate of Geology
National Hydrocarbons Company (ENH)
Ministry of Mineral Resources & Energy
Mozambique LNG (Anadarko’s AREA 1 LNG Project)
ENI Mozambique
Delonex
TOTAL Mozambique
Sasol Mozambique
ExxonMobil Mozambique

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