Mozambique Oil & Gas: Shell refinery to cost $7 billion

According to the CEO of Empresa Nacional de Hidrocarbonetos (ENH), Omar Mithá, Shell (LSE:RDSA) will invest more than 7 billion dollars to operate the project. “If we did not count the projects of ENI and Anadarko, it would be the second largest project of Mozambique after Mozal and would be seven times more than Mozal, “said Omar Mithá, who assured that ENH will enter as a shareholder in the project.

Mithá has no doubts about the economic impact that it will have in Mozambique: “Just for the production, it can supply one million cars a week and hundreds of Boeing 737s,” which could represent a major turning point in terms of the weight of gas in the imports of liquid fuels currently made by the Government.

Shell itself in the press statement covering the visit of the Head of State said that these are aspects that are being negotiated with the Government and that they may demand an attractive tax regime. Alex Battaglia, Shell’s representative in Mozambique, did not say, however, what the tax regime the company could propose to the Government.

In relation to the other two projects that the Government awarded, part of Rovuma’s natural gas, Mitha said that it did not have the investment values ​​that they will carry out, because ENH will not integrate the respective shareholder structures. But it is known that it is Yara International, which has been awarded 90 million cubic feet / day for the production of 1.3 million metric tons of fertilizers and 50 megawatts of electric power, and GI Energy Africa accounted for 41.8 million Cubic feet / day for the production of 250 megawatts of electricity.

On the other hand, Omar Mithá clarified that all this amount of natural gas will not be the royalties that the Government should receive from ENI and Anadarko, but the part of the gas that those companies are obliged by law to sell in the national territory to promote local industrialization and economic development. Moreover, on royalties, the Government prefers to export gas and earn money in order to finance its activities.

In the meantime, the Government had to hold a public tender to ensure transparency in the distribution of the quotas for this natural gas, because there was a lot of competition. “In order that there might not be a situation of inequality, favoritism or other situations that could be associated, even corruption, it was preferred to make a public tender,” said Mithá, adding that among the criteria were taken into account ” Profitability, effects on the economy, reduction of imports, reduction of regional asymmetries, among others, without forgetting, of course, the viability and sustainability of the project itself, from the socio-economic point of view, “he said.(source: OPAIS)