Mozambique Partners with Eni and Others to Become Major LNG Exporter

Claudio Descalzi, CEO of Italian gas and oil company Eni has likened the liquefied natural gas (LNG) potential in Mozambique to a “feast”. The feast, which Mozambique and its international partners yearn for, boasts a starter and two main courses that could place the country among the world’s 10 largest exporters of liquefied natural gas (LNG) within the next decade.

The banqueting will begin in 2022, when 3m tonnes of natural gas per year (3mtpa) will travel in a liquefied state under the high seas. “It’s a large starter. It’s lunch, dinner, even, but we prefer to call it a starter in comparison with the much larger reserves that Mozambique has,” said Descalzi during the announcement of a final investment decision to fund a floating platform that will be connected by an umbilical cord to the Coral Sul reserves.

One of the “main courses” is expected to be served in 2024, by the Area 1 consortium. The plan envisages two 12.88mtpa LNG pipelines on the Afungi peninsula running from the Golfinho and Atum reserves. With further deposits to tap into, this could expand to up to eight lines. The final decision to invest was announced in June 2019 by Anadarko, since bought by Occidental, which in turn sold its LNG assets to Total. “As a new operator, we are fully committed to the project”, affirmed Total CEO Patrick Pouyanné in September.

The second main course will be served by the Area 4 consortium with the exploration of the Mamba deposits, which will feed two LNG pipelines at an overall rate of 15.2mtpa, with these lines predicted to run from 2024/25 in the Afungi industrial area, shared with Area 1. But definitive confirmation of investment is needed for Area 4.

The president of Mozambique’s National Petroleum Institute (INP), Carlos Zacarias, hopes that this will happen “as soon as possible, towards the end of this quarter”. According to Zacarias, everything currently depends on formalising the commitment that has already been agreed upon by all partners and backers.

READ MORE: Mitsui & Co. to invest $2.5bn in Liquefied Gas in Mozambique

Prospecting Allocations

Several LNG prospecting operations are being prepared after Mozambique granted licences at the end of 2018 with Eni leads one consortium (34%). Others include Qatar Petroleum (25.5%), South Africa’s Sasol (25.5%) and Mozambican state company ENH – Empresa Nacional de Hidrocarbonetos (15%). ENH was assigned prospect block A5-A, an area spanning 5,133 sq. km with depths ranging between 300 and 1,800 metres, in completely unexplored offshore territory opposite the district of Angoche, central Mozambique.

Meanwhile, ExxonMobil holds half of another prospect consortium featuring Mozambican state company ENH, with 20%, Russia’s Rosneft with another 20% and Qatar Petroleum with 10%. Contracts cover three offshore blocks: Angoche A5-B, Zambeze Z5-C and Zambeze Z5-D.

On land, South Africa’s Sasol will carry out prospect operations in area PT5-C, covering 3,000 sq km in the centre of the country in the Pande-Temane area, Inhambane province, from which it has already extracted 1.8 trillion cubic feet of natural gas since 2004, with the majority largely directed towards South Africa via pipeline.

In this same region, Sasol is pressing ahead with exploring the Inhassoro reserves in order to produce 5,000 barrels of light oil per day. “Initial estimates suggested a higher production volume”, however, it will end up being “a small-scale yield”, stated Zacarias. “We still don’t have refineries in the country.” This means output will either be destined for the production of cooking gas or for export, he added. The reserves will be explored in accordance with a plan put forward in 2015.