Mining & Energy
Portugal's Galp believes that Mozambique will lead world gas production
Research by the news organisation Bloomberg has found that oversupply of liquefied natural gas (LNG) on the world market will be a third less than predicted.
Bloomberg found that demand is growing at the fastest pace since 2011, which has shrunk the predicted oversupply of LNG. Indeed, according to Bloomberg, “the market is now expected to tip into deficit by 2025, if no new export projects are developed”.
This leads it to state that “the global energy giants that have delayed investment in new LNG projects may need to soon embark on a new slate of multibillion dollar plants, even as they finish constructing the current wave of developments”.
Although Bloomberg does not mention Mozambique in particular, it is clear that its analysis is highly relevant to the country’s nascent LNG sector. In the Rovuma Basin, off the coast of the northern province of Cabo Delgado, two LNG megaprojects are awaiting the go ahead from the operators of Area Four (the Italian hydrocarbon company ENI) and Area One (Houston based Anadarko).
ENI has already made its Final Investment Decision for a Floating LNG unit that will be installed in Area Four. This will produce 3.4 million tonnes of LNG per year. Yet this is relatively small compared with the plans for the onshore LNG facilities that will eventually be opened on the Afungi Peninsula in Palma district.
There have been long delays in launching these megaprojects, mainly due to the low price of LNG caused by the glut in supply as new projects have come on line.
Initial hopes were that LNG would begin to be exported from Mozambique in 2019. It is now expected that ENI will begin operations in 2022.
Anadarko has not yet made its Final Investment Decision on its LNG project, which will produce 12 million tonnes of LNG per year. In April, one of its partners, Mitsui, announced that it expects to make the Final Investment Decision in mid-2018.
ENI is also planning its own onshore LNG facility as well as a joint project to monetise the gas from a field that straddles Areas One and Four.
These projects would make Mozambique the world’s third largest exporter of LNG, after Qatar and Australia.Source: AIM
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