Rovuma Basin Mozambique LNG Projects: World Bank warns against convergence of natural gas prices on the Asian, European and American markets

The World Bank warned, Tuesday in Maputo, that related to liquid natural gas (LNG) projects in the Rovuma basin, convergence of natural gas prices on the Asian, European and American markets can be a risk to Mozambique.

However, this would not affect the start of the projects, which is scheduled for 2018, the director of the global macroeconomic trends team, Andrew Burns said Tuesday in Maputo.

The WB forecasts the Mozambican economy will grow by 8.1 percent this year and by up to 8.6 percent in 2015.

During the presentation of the half-yearly “Global Economic Outlook” report for sub-Saharan Africa, Burns said that Mozambique’s gross domestic product (GDP) growth would continue to be driven by “string investments” in the country’s economy.

According to Burns, the country’s current account deficit, which the World Bank estimates will total 49 percent of GDP at the end of the year, is a concern when looked at from a long-term perspective and requires immediate attention by the Mozambican authorities, whose “big challenge” is to “convert investment in the country into sustainable development.”

“The investment phase is the big challenge facing the companies, but, as soon as it finishes, they can continue to extract resources for a long time,” Burns noted.

The World Bank’s chief economist for Mozambique, Julio Revilla, said that the current circumstances of the international natural gas market “are not the same as they were two years ago,” and called on the country to speed up development of the projects and secure long term sales contracts for the LNG it plans to produce in the future.