ENH expects US$50 billion of investment in hydrocarbons – Mozambique

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ENH expects US$50 billion of investment in hydrocarbons – Mozambique

6:37 CAT | 11 Jul 2018

Mozambique’s publicly owned National Hydrocarbon Company (ENH) on Wednesday predicted that fifty billion US dollars of investment will be pledged for the hydrocarbon sector during 2019. This relates largely to the final investment decisions that are due to be made by the operators of Offshore Areas One and Four, Anadarko and ENI respectively.

The head of ENH, Omar Mitha revealed this figure at the opening of a conference in Maputo on local content provision. Around four hundred people are attending the event that will be addressed by international experts.

Mitha explained, “this will be one of the largest investments in Africa” and added that the Texas based company Anadarko is working towards taking its final investment decision for the construction of a facility with two factories (known as trains) capable of producing a total of 12.88 million tonnes of liquefied natural gas (LNG) per year.

Anadarko is competing with the Italian giant ENI over which will be the first to open an LNG facility on the Afungi peninsula, in the north of the province of Cabo Delgado. ENI is working with its partners, including the US giant ExxonMobil, on its final investment decision for the construction of its 15.2 million tonnes per year LNG facility based on gas from Offshore Area Four. Anadarko and ENI are expected to take these decisions next year.

The capital expenditure that will be attached to these final investment decisions will be spread over several years as Anadarko has pencilled in 2023/24 for the start of production, whilst ENI is looking at 2024. It should also be noted that the vast majority of this expenditure will be spent outside of Mozambique where the LNG facilities will be designed and manufactured.

ENI has already taken its financial investment decision to develop a floating liquefied natural gas (FLNG) project in Area Four. The FLNG platform is to start production in 2022, with a capacity of 3.4 million tonnes of a year.

Mitha pointed out that there are seven blocks where hydrocarbon research and production are underway. Four are in the Mozambique Basin and three in the Rovuma Basin.

He stressed that Mozambicans cannot be mere spectators while these huge investments are being undertaken. However, he “recognised the limitations of our companies, particularly regarding access to information, access to finance, technical capacity, and international certification on quality, hygiene, and security”.

He therefore urged national companies to increase their capacity to provide services at the levels required by international standards.

The conference is being held as the country prepares to monetise the natural gas resources discovered in the Rovuma Basin. Mozambique has known reserves of about 170 trillion cubic feet of natural gas, 150 trillion in the Rovuma Basin and 20 trillion in the Mozambique Basin.

Source: AIM