GlobalData, a data and analytics company, stated that Mozambique is expected to become one of the top 10 largest LNG producers in the world by the mid-2020s
It added that more than 30mn tonnes of LNG per year (mtpa) will be on stream by 2020, on a par with Nigeria and Algeria.
The company noted that the feed gas for new LNG projects will come from the ultra-deepwater Rovuma Basin, where more than 125 tcf of recoverable natural gas resources have been discovered.
Cao Chai, oil and gas analyst at GlobalData, said, “The development break-even gas price of around US$4-5 per mcf for the onshore LNG projects in Mozambique is competitive compared to current Japan spot LNG prices of US$9.24 per mcf.”
“This is due to the relatively low expected capex per mtpa in comparison to other integrated LNG projects around the world, and the low upstream cost compared to non-integrated LNG projects in the Americas,” he added.
Both external and internal Mozambique-specific challenges have slowed the country’s LNG developments. However, positive signs such as securing additional gas sales and purchase agreements have formed the majority of Mozambique and Rovuma LNG participants’ activity so far in 2019
These contracts are a vital part of the project’s progress towards the construction phase as they provide some certainty about future revenues to underpin the massive capex of nearly US$40bn needed to bring these facilities online.
“The advancement of LNG business in Mozambique will transform the country to a major global LNG supplier. It will also bring direct revenue to the Mozambique government and promote the growth of local industries through a domestic gas component of the initial project and follow-on expansions. Furthermore, construction on the LNG megaprojects is expected to last for over a decade providing significant employment and training opportunities for Mozambicans,” he added.
