Mozambique expects €62.5M tax revenues from LNG in 2024

Login

Register

http://www.clubofmozambique.com/

Mozambique expects €62.5M tax revenues from LNG in 2024

8:02 CAT | 15 Nov 2023

File photo: Lusa

The Mozambican State expects to receive 4,268 million meticais (€62.5 million) in tax revenue from natural gas next year, according to government data which Lusa accessed on Tuesday.

According to documents supporting the proposal for the Economic and Social Plan and State Budget (PESOE) for 2024, these revenues, coming from the Coral Sul liquefied natural gas (LNG) project in the Rovuma Basin, still however represent only 0.3% of the gross domestic product (GDP) expected for next year.

Mozambique’s natural gas exports soared by 80.9% in volume in the second quarter, compared to 2022, in an amount estimated at US$336 million (€318 million), according to central bank data previously reported by Lusa.

According to a report by the Bank of Mozambique on the country’s balance of payments in the second quarter of this year, this is an inflow of US$238.1 million (€225 million), higher than in the same period of 2022, essentially explained “by increase in exported volume”.

Despite this increase, natural gas failed to topple mineral coal, which earned the country US$583.4 million in the second quarter, as Mozambique’s main export product.

Area 4 is operated by Mozambique Rovuma Venture (MRV), a joint venture co-owned by ExxonMobil, Eni and CNPC (China), which holds a 70% stake in the concession contract, whose natural gas production began in 2022. Galp, Kogas (South Korea) and Empresa Nacional de Hidrocarbonetos (Mozambique) each hold a 10% stake.

Eni, the concessionaire of Area 4 of Rovuma, is already discussing with the Mozambican government the development of a second floating platform, a replica of the first to be called Coral Norte, according to a source from the Italian oil company.

“Eni is working towards the development of Coral Norte through a second FLNG in Mozambique, taking advantage of the experience and lessons learned at Coral Sul FLNG, including those related to costs and execution time,” added the same oil company source.

A previously released document, prepared by the Mozambican firm Consultec for the oil company Eni, indicates that this is an investment of US$7 billion (€6.3 billion), subject to approval by the Mozambican government.

If the schedule goes as expected, the platform will begin production in the second half of 2027, meaning it could start even before onshore projects, which depend on the security implications of the armed insurgency in Cabo Delgado.

Coral Norte will be situated 10 kilometres north of Coral Sul, where production started in November last year, making it the first project to take advantage of the large reserves in the Rovuma basin.

Source: Lusa