Mining & Energy
Mozambique's CTA signs MoU with Italy's Assomineraria to promote local content
Platforms in the Rovuma Basin (2012)
US oil major Anadarko will on Tuesday formally announce one of the biggest investments ever made in Mozambique.
The development plan for Rovuma Basin Area 1 in Cabo Delgado, Mozambique’s northernmost province, is estimated at US$25 billion – twice the country’s gross domestic product, meaning double the wealth which the country produces each year.
The final investment decision-making ceremony is scheduled for Tuesday, June 18, and represents only half of the promised prosperity, because a similar sized plan has already been approved by the government for another consortium operating in Area 4 of the same Rovuma basin, whose final announcement may happen by the end of the year.
Natural gas projects are expected to go into production in about five years’ time and boost the country’s economy growth to more than 10 percent a year, according to the International Monetary Fund and other entities.
To get there, Area 1 will invest US$25 billion in drilling the seabed and piping natural gas 40 kilometres to a new factory on the Afungi peninsula in Palma district, where it will be liquefied.
A special wharf will be built at the site of the the liquefied natural gas factory to be exported mainly to Asian markets in China, Japan, India, Thailand and Indonesia, and also to European markets via Electricity of France, Shell or British Centric.
A smaller portion will stay in the country and used for electricity production or turned into liquid fuels and fertilisers in Mozambique.
Everything should be ready by 2024. The Area 1 plan initially foresees two gas liquefaction lines with a total production capacity of 12.88 million tons per year (mtpa), but the venture could expand to up to eight lines.
The ambition is justified by the size of the discovery made since 2010 in Area 1 and amounting to 75 trillion cubic feet (tcf) of gas deposits buried beneath the sea bed – a giant number: 75 followed by twelve zeros. In the neighbouring Area 4, the value will reach 85 tcf.
Anadarko considers its Area 1 deposits equivalent to twice the gas and oil that is to be exploited in the British North Sea area and classifies the Rovuma basin as the second-largest hydrocarbon exploration zone in the world.
The Area 1 consortium has been involved with preparatory works in Cabo Delgado for a year and a half. These include a new village where communities will live, new roads and an airstrip for the future gas city of Palma serving the hundreds of new workers who will work on the megaproject.
Engineering and construction work involves dozens of companies, some Portuguese, and all of which have been under pressure from armed attacks by criminal groups in Cabo Delgado. A Mozambican driver was assassinated in February in the first attack to hit workers in the venture, followed by further injuries in other incidents.
Anadarko has said that, although some of its officials have been hit, there is no evidence that the attackers targeted their investment, and that security measures are keeping pace with the evolving threats.Source: Deutsche Welle