Mozambique: Exxonmobil Consortium Wants to Update Onshore Gas Project

The US oil and gas company ExxonMobil says that the consortium it heads, in Area Four of the Rovuma Basin, off the coast of the northern Mozambican province of Cabo Delgado, wants to upgrade the project for a natural gas liquefaction plant.

The project was first announced in 2018 but ExxonMobil has yet to announce its Final Investment Decision.

The consortium published an advertisement in the Maputo daily "Notícias', requesting proposals for engineering services with "potential' for construction of a liquefaction plant on the Afungi Peninsula, in Palma district. This is the same area where a second consortium, headed by the French oil and gas company TotalEnergies, intends to build two liquefaction factories.

Construction work on the TotalEnergies project was halted two years ago when Islamic State-linked terrorists attacked the town of Palma.

However, improvements in security, thanks to the anti-terrorist actions implemented by the Mozambican Defence and Security Forces and their allies from Rwanda and the Southern African Development Community Military Mission (SAMIM), might allow work to resume in the middle of this year, according to sources linked to the operations.

On the ExxonMobil side, the announcement published Monday "reinforces the efforts of Area 4 to move forward with the development of the Rovuma LNG project.'

"An alternative concept is sought (...), taking advantage of existing knowledge and engineering data to increase the value of the development for all stakeholders', it added, updating what was envisioned five years ago.

According to the announcement, the plant, with several liquefaction lines, is now intended to produce 18 million tonnes of LNG per year, up from the 15.2 million tonnes mentioned in the 2018 project.

Demand for alternative sources of natural gas has increased worldwide, but construction costs have also become more expensive, raising concerns about the project's competitiveness.

The final onshore investment decision depends on creating "a sustainable and safe operating environment and long-term project competitiveness, considering market volatility.'

"Area 4 partners remain committed to working with the Government of Mozambique to develop the resources of the Rovuma basin', the advertisement added, and they are preparing "to resume activities as soon as safety conditions allow'.

Area 4 already exports gas from the Rovuma Basin through a floating platform operated by the Italian energy company Eni. The ENI floating platform can produce 3.4 million tonnes of LNG a year, and the entire production has been purchased in advance for the next 20 years by BP.

This article originally appeared on AIM

Photo: Financial Times