Mozambique: Natural gas exports in Q1 up 30% to $443M despite market price falls

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Mozambique: Natural gas exports in Q1 up 30% to $443M despite market price falls

10:45 CAT | 30 Jul 2024

File photo: Lusa

Natural gas exports from Mozambique amounted to US$443 million (€408.8 million) in the first quarter of the year, an increase of almost 30% compared to the same period in 2023.

According to data from a report by the Bank of Mozambique, to which Lusa had access on Tuesday, the revenues from LNG exports in the first quarter of 2024 contrast with US$340.9 million in the first quarter of 2023.

“The increase in revenues from natural gas results from the increase in the volume exported associated with the start of exploitation and export of gas from Area 4 of the Rovuma basin, despite the average price on the international market having fallen by 43.5%,” reads the central bank document, detailing Mozambican exports.

Mozambique has the third largest natural gas reserves in Africa, estimated at 180 million cubic feet, and currently has three approved development projects to exploit the natural gas reserves of the Rovuma basin, classified as among the largest in the world, off the coast of Cabo Delgado.

Mozambique’s natural gas sales amounted to US$1.726 billion in 2023, three times more than in 2022 and approaching coal, which still leads Mozambican exports, according to data previously reported by Lusa.

According to data from previous statistical reports by the Bank of Mozambique, natural gas exports increased by 218% in 2023 compared to the previous year, when these sales reached US$541.6 million (€499.2 million).

In 2023, Mozambique also exported gas in a value identical to the sum of the years 2017 to 2022, which totalled more than US$1.866 billion (€1.720 billion).

The increase in natural gas exports continues to be explained by the start, at the end of October 2022, of operations in Area 4 – the only one of the three approved projects already in the production phase – 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.

Eni, the concessionaire of Area 4 of Rovuma, is currently developing a second floating LNG platform, a copy of the first and called Coral Norte, to increase gas extraction, a source from the Italian oil company told Lusa last month.

This plan involves, in particular, the acquisition of a second FNLG for the Coral North area, already under construction in South Korea, identical to the one that has been operating in gas extraction since mid-2022 in the Coral Sul Area.

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

A previously released document from the Mozambican firm Consultec for the oil major 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 planned, the Coral Norte FLNG platform will begin production in the second half of 2027, that is, it could start even before the onshore projects, which depend on security implications due to the armed rebellion in Cabo Delgado.

Coral North will be stationed 10 kilometres north of Coral Sul, whose production began in November last year, becoming the first project to take advantage of the large reserves in the Rovuma basin.

Source: Lusa