Mozambique: Total considering logistics base in Mayotte – AIM report

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Mozambique: Total considering logistics base in Mayotte – AIM report

5:41 CAT | 27 Jan 2021

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The French oil and gas company Total is considering setting up a logistical base for its Mozambican operations, not in any part of Mozambique, but on the French Indian Ocean possession of Mayotte, according to a report in Wednesday’s issue of the independent newssheet “Carta de Mocambique”.

Total heads the consortium which is developing a liquefied natural gas (LNG) project in Palma district, in the northern Mozambican province of Cabo Delgado. With an investment estimated at 23 billion US dollars, the two gas liquefaction plants that Total and its partners intend to build on the Afungi Peninsula will be the largest foreign investment ever in Mozambique.

Also read: Total eyes Mayotte as possible rear base for Mozambique LNG – report

“Carta de Mocambique” claims that the Total Chief Executive Officer, Patrick Pouyanne, has been negotiating with the Mayotte authorities to base its offshore operations on the island, and to store equipment there.

Mayotte is about 500 kilometres from the Cabo Delgado provincial capital of Pemba. It has a deep water port, a small naval base and a fully functioning hospital complex.

One drawback is that the runway at Mayotte is only 1,930 metres long – not long enough to accommodate the large aircraft Total may wish to use. But French President Emmanuel Macron has promised to extend the runway to 2,600 metres before his term of office ends in 2022.

“Carta de Mocambique” reports that the subcontractors who work with Total are reluctant to relocate to Mayotte. Nonetheless, Total has asked them to assess the cost of moving some operations to Mayotte.

If Total pushes ahead with this plan, it could spell the end of the Mozambican government’s hopes to set up a logistics base for the oil and gas industry at Pemba.

Former President Armando Guebuza laid the first stone for the Pemba Logistical Base in August 2014. The base is intended to provide integrated port and logistics services to satisfy the needs of the hydrocarbon companies operating in the Rovuma Basin, off the coast of Cabo Delgado, and their suppliers.

But the main hydrocarbon operators at the time, the Texas-based company Anadarko (Total’s predecessor at the Afungi project) and the Italian energy company, ENI, showed little interest in the base.

The government granted the company Ports of Cabo Delgado (PCD) a 30 year lease on the base. PCD is owned 50 per cent by Mozambique’s National Hydrocarbon Company, ENH, and 50 per cent by the port and rail company CFM. PCD then subleased the Pemba base to ENH Integrated Logistics Services (ENHILS), which is a partnership between ENH Logistics (a 100 per cent owned subsidiary of ENH) and the Nigerian company Orlean Invest.

The first phase of the construction of the base was concluded in early 2020. This included a 300-metre pier and the production and assembly of underwater equipment facilities. But there were no customers. No ships were yet calling at the base.

If Total really does base much of its Mozambique operation at Mayotte, it is hard to see the Pemba Logistical Base becoming viable.

Source: AIM