Two new LNG projects will make Mozambique a heavyweight in the LNG export market to Asia says John Snyder
The LNG industry is focused intently on the sub-Saharan African country of Mozambique. There, two LNG projects are unfolding that will play key roles in meeting Asia’s appetite for LNG in the next decade, generating demand for LNG ship capacity and improving the economy of one of the world’s most underdeveloped nations.
In fact, the Mozambique LNG projects could make the country a heavyweight in the LNG export arena. They are also both part of a wave of global LNG megaprojects that are set for FID this year.
US oil independent Anadarko Petroleum’s 18 June FID on the US$20Bn-valued Mozambique LNG set in motion the development of Mozambique’s first onshore LNG facility. Anadarko Petroleum’s partners in the Mozambique LNG project are Japan’s Mitsui, Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), Thailand’s PTT and India’s ONGC, Bharat Petroleum Resources and Oil India.
The facility consists of two liquefaction trains with a total nameplate capacity of 12.88 mta. Gas will be fed to the onshore LNG facility from subsea wells in the Golfinho/Atum field, in Offshore Area 1, and capacity could grow to become 50 mta in subsequent phases.
About 9.5 mta of the 12.88 mta will be delivered on an ex-ship basis, and now that the FID has been reached, LNG carriers are awaiting Anadarko’s tender for the long-term charter of 16 ships.
In May, the Mozambique Government approved the development of the Rovuma LNG Project, setting the stage for an FID by the partners later this year.
The Rovuma LNG Project will market natural gas from three reservoirs located in ultra-deep water in the Area 4 block offshore Mozambique. Area 4 is operated by Mozambique Rovuma Venture SpA, a joint venture between ExxonMobil, Italy’s Eni and China National Petroleum Corp, which hold a 70% interest in the Area 4 block. The remaining 30% interest is split equally between Portugal’s Galp, South Korea’s Kogas and ENH. The marketing effort for the LNG produced from the Rovuma LNG project is jointly led by ExxonMobil and Eni.
Sales and purchase agreements for 100% of the LNG capacity for trains 1 and 2 have been submitted to the government for approval, which together will produce more than 15 mta.
During the production phase, the Rovuma LNG project expects to provide up to 17,000 tonnes of LPG per year in Mozambique from Area 4 resources, which amounts to about 50% of the country’s current LPG import volumes.
Based on current estimates, first production from Rovuma LNG should come in 2022, while Mozambique LNG will start in 2024, coinciding with the expected uptick in LNG demand from China, India and southeast Asia.
As Wood Mackenzie sub-Saharan Africa team analyst Jon Lawrence noted "With strong LNG demand growth out of Asia, now is Mozambique’s time".
Notably, the Area 4 partners also plan to distribute up to 5,000 LPG burners and cooking stoves in the Afungi area to replace wood burning. While that may sound like just a publicity stunt, it actually could save lives. According to the World Health Organisation, each year, close to 4M people die prematurely from illness attributable to household air pollution from inefficient cooking practices using stoves that burn solid fuels and kerosene.
Mozambique will also be a proving ground for the use of floating LNG (FLNG) technology in ultra-deepwater. In 2017, Eni reached FID on the development is Coral Sul, the world’s first ultra-deepwater FLNG, under construction at South Korea’s Samsung Heavy Industries and expected to operate in water depths of more than 2,000 m.
Other megaprojects on track for FIDs in 2019 are Novatek’s 18.3 mta Arctic LNG 2 facility, Tellurian’s 27.6 mta Driftwood LNG in Lake Charles Louisiana and the new megatrains at Ras Laffran as part of its Qatargas’ North Field expansion.
And with an ever-increasing number of national clean energy policies being put into place around the world, we should expect the ball to keep rolling this year on additional FIDs.