Mozambique Oil & Gas: Anadarko LNG project foresee US$2.5B on contracts with SME’s

SOL - Pemba 2018.jpgMultinational oil company Anadarko plans to spend US$2.5 billion on contracts with Mozambican small and medium enterprises or which are registered in the country during the construction of the first natural gas facility in Mozambique, Steven Wilson, the company’s Country Manager and Vice President said.

“We are committed to supporting small and medium-sized Mozambican companies to reach international standards and seize opportunities with gas exploration,” said Mitchel W. Igram at a seminar on local opportunities in the city of Pemba, province of Cabo Delgado, northern Mozambique.

The amount will be spent during the process of building facilities for exploration, including a new village for resettlement over a period of five years as a result of the exploration of natural gas found deep under the seabed in Area 1, estimated to have about 75 trillion cubic feet of recoverable natural gas.

Of the US$2.5 billion (US$2.18 billion), of which US$850 million (€743 million) has already been spent and US$1.5 billion (€1.31 billion) will be spent with local companies, according to information provided by the vice president of the US company.

Certification is considered to be the main challenge of Mozambican companies in the opportunities arising from exploration of mining resources by multinationals, but Anadarko has given assurances that it will support the country’s businesses on this point.

“We will do whatever it takes to prevent the issue of certification from being a sticking point for Mozambican companies. We will start now, providing funds for the necessary training, including through events to support Mozambican businesses,” said the vice president of Anadarko.

Issues related to the resettlement of the population of Afungi, where the land-based facility will be built, are also being addressed and up to 560 households are expected to be transferred.

Anadarko’s development plan for natural gas exploration in Mozambique, which has already been approved by the Government, involves an investment of US$30 billion (over €26 billion), which could generate around US$52 billion (€45 billion) for the State in average revenues of US$2.1 billion (€1.8 billion) per year from 2025, according to official figures.

Anadarko, which already employs nearly 2,000 Mozambicans in the initial phase of the project and expects to reach 5,000, leads the group of companies that will explore the natural gas found 40 kilometres off the province of Cabo Delgado, in the far north of Mozambique – on the border with Tanzania.

The investment, one of the largest ever in Mozambique, has no date yet to move ahead, but the consortium is undertaking a number of associated works so that as soon as there is a final investment decision scheduled for the first quarter of 2019, construction can begin.

After drilling, the gas will be piped to the industrial site to be built on the Afungi peninsula, where it will be converted into liquid and loaded onto freighter ships with special containers for export.

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