Mozambique Oil & Gas: “All systems go for gas from northern Mozambique to flow in four years” – Deputy Minister

All investments required to the north of Mozambique to begin producing liquefied natural gas in about four years are underway, Deputy Minister of Energy and Mineral Resources Augusto de Sousa Fernando told Lusa in an interview.

The dates are inscribed in the calendar: “We continue through 2022, in late 2023, as per prediction and with everything going well, we have the platform working at that time,” he explained.

The South Coral floating platform, to be positioned in Area 4 of the Rovuma basin and owned by a consortium led by Eni and Exxon Mobil, will be the first to extract natural gas from wells at the bottom of the Indian Ocean.

The final investment decision was announced in 2017, and the platform is being built at a shipyard in South Korea.

The Exploration of Area 1, which is right next door, is scheduled to begin by 2025, but the industrial processing zone for that area will be onshore, and is already being prepared on the Afungi peninsula, Cabo Delgado, by a consortium led by Anadarko.

The final investment decision (FID) of this consortium is scheduled for “the first half of next year”, de Sousa said, but works underway on the ground indicate that the investment is irreversible.

Nevertheless, the day the FID is announced will be a date to celebrate, de Sousa says: such is the power of that acronym in natural gas jargon and the investment potential that it entails.

“It’s like a football game: we are all certain that we will win, but when we score a goal, it will certainly be [cause for joy] for all of us, for the country in a general way,” he said.

“Our enemies are always attentive…”

Nothing has affected progress towards seeing the gas flow, not even the year-long wave of violence in remote villages in the region where the investments are taking place which has cost the lives of 100 civilians and military personnel.

“Nothing has been delayed. At the moment, everything is on schedule,” the deputy minister said. The attacks seem to be a situation that, for investors, “will be controlled with ease”.

“We will make a qualitative leap with this gas. Our enemies are always attentive and want to go in the opposite direction, but it is up to us to be able to react, “said the deputy minister. “In the business area, it is always like this,” he added, without going into further detail.

The Area 4 platform will produce 3.4 million tons of liquefied gas per year, but the Area 1 plant will triple that, and fuel domestic projects as well as exporting.

De Sousa Fernando says that using the gas to produce electricity should be a priority because “all other industries need energy”. “If we can produce energy cheaply, we will enable other industries that also need energy,” he said.

In addition, the Electricity Infrastructure Development Master Plan determines that more than half will be produced from natural gas in 25 years.

“If we get a preferential price [from the gas exploration utilities], it will be a win-win situation for the whole country,” he says.

There is already an indicative price for the Area 1 gas that Mozambique will use to produce electricity, but it is still to be negotiated in detail, he said.

The deputy minister told Lusa that by the end of the year the Ministry of Mineral Resources and Energy would operationalise an Energy Planning Unit covering other projects anchored in the apportioning of natural gas for domestic use.

These include a fertiliser plant from Norwegian company Yara, another from Anglo-Dutch Shell to produce fuels and a third project from GL Energy Africa, a British company, that will turn gas into electricity – and more projects may be in the pipeline.

Representatives of various public entities come to the minister’s door, he said, each with his own project based on natural gas, “but there has to be a ranking of what is a priority for the country”, based on an evaluation on the merit of the projects, which would be made by the new unit, he said.

“Each sector pulls to its own side. We have to have planning capacity,” he emphasised.

De Sousa goes further and says that this work of project preparation should be done before the discoveries of gas and oil reserves, in order to give the state greater negotiating power. A lesson to apply now, at a time when Mozambique has just signed eight-year oil and gas research and exploration contracts in five other onshore and offshore areas. Source:Lusa