Mozambique to see $3B in revenues of Area 1 from 2030 – consultant

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Mozambique to see $3B in revenues of Area 1 from 2030 – consultant

3:02 CAT | 24 Jun 2019

File photo: Anadarko

The consultant Wood Mackenzie estimated that revenues of the natural gas project approved last week in Mozambique will, in ten years, be worth $3 billion annually, doubling the current total amount.

“We believe that, from the beginning of the decade of 2030, the state revenues of the Mozambique LNG project will reach $3 billion [more than €2.6 billion] per year, doubling, by itself, the current revenues calculated by the International Monetary Fund and the World Bank,” said analyst Jon Lawrence, on a note sent to Lusa.

Commenting on the natural gas projects in Mozambique, the analyst said that the Final Investment Decision, announced by Anadarko last week, becomes the second most costly decision to follow the Arctic LNG-2 project in Russia, and the largest ever in the sector of oil and gas in sub-Saharan Africa.

The development plan of Area 1 of the Rovuma Basin in Cabo Delgado, Mozambique’s most northern province, is valued at $25 billion – double the country’s gross domestic product (GDP), that is, the wealth that the country produces each year.

Natural gas projects should come into production within approximately five years and make the country’s economy grow by more than 10% per year, according to the IMF and other entities.

To get there, Area 1 is to invest $25 billion (€21.97 billion) that will be used to pierce the bottom of the sea, suck the natural gas through 40km of piping to a new factory where it will be transformed into a liquid, in the Afungi Peninsula, in Palma district.

By this factory, a pier is to be built for special cargo ships to fill up with liquefied natural gas (LNG), which will be sold mainly to Asian markets (China, Japan, India, Thailand and Indonesia), but also European countries, through the Eletricidade of France, Shell or the British Centrica.

Anadarko said that the deposits of its Area 1 are equivalent to double the gas and oil that there is to explore in the British area of the North Sea and classified the Rovuma basin as the next major hydrocarbon exploration zone in the world.

In addition to Anadarko, which leads the consortium with 26.5%, the group operating Area 1 includes Japan’s Mitsui (20%), Mozambican oil company ENH (15%), with smaller holdings to other two Indian companies, ONGC (10%) and Beas (10%) and Bharat Petro Resources (10%) and Thailand’s PTTEP (8.5%).

Anadarko should give the lead of the consortium to the French Total until the end of the year, after being purchased (a process still underway) by another U.S. oil company, Occidental, which in turn celebrated an agreement for the sale of assets in Africa.

The consortium of Area 1 has been having for a year and a half several preparatory works in Cabo Delgado.

Source: Lusa