Mozambique Oil & Gas: US$77 Billion in Taxes Expected From Rovuma LNG over 25 years

The Mozambican government expects to gain about 77.5 billion US dollars in taxes over the life span of the two liquefied natural gas (LNG) projects planned so far for the Rovuma Basin, off the coast of the northern province of Cabo Delgado.

Speaking in a two day question and answer session in the Mozambican parliament, the Assembly of the Republic, the Minister of Mineral Resources and Energy, Max Tonela, said the first project to come on-stream would be the floating LNG facility planned by a consortium headed by the Italian energy company ENI in the deep waters of Area Four of the Rovuma Basin.

Eni and Area 4 partners total investment, Tonela told the Assembly, is estimated at eight billion dollars. The various taxes that the ENI-led consortium should pay will generate revenue of 24.5 billion dollars for the Mozambican state over the lifespan of the project.

The second LNG project, developed by the US company Anadarko and its  partners in Area 1 of the Rovuma Basin, is much larger. Anadarko’s Development Plan, approved by the government in February this year, envisages the construction of two LNG factories (known as “trains”) onshore, in the Afungi Peninsula, in Palma district. Each train will have a nominal production capacity of six million tonnes of LNG a year.

Tonela said that the Anadarko-led consortium has finalised long term contracts for the sale and purchase of five million tonnes of LNG a year. When the figure of guaranteed sales reaches nine million tonnes a year, the consortium will take its Final Investment Decision, expected in the first quarter of 2019. A start will be made on building the LNG trains in late 2020.

Anadarko and its partners are planning to invest around 30 billion dollars. Tonela said the onshore LNG plants will generate around 53 billion dollars in revenue for the Mozambican state.

The Minister added that the two LNG projects will create about 5,000 jobs in the construction phase, and about 1,000 jobs in the operational phase. He believed that 18 per cent of the goods and services needed by the projects could be provided by Mozambican companies, and 23 per cent by “companies associated with Mozambicans”.

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