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Moz gas finds to catalyse infrastructure, economic development

Moz gas finds to catalyse infrastructure, economic development

Photo by Bloomberg

3rd June 2015

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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The anticipated deployment of gas monetisation strategies in Mozambique, which will include liquefied natural gas (LNG) export terminals, gas-to-power projects and petrochemical plants, have the potential to unlock the country's vast natural gas production capability, drive the development of “massive” energy and industrial infrastructure and anchor the country as a regional gas hub, new analysis from Frost & Sullivan shows.

The report, dubbed ‘Mozambican Gas Sector: Major Opportunities Across Multiple Industries’, stated that, should gas projects be dispersed geographically, the construction of transmission and distribution gas pipelines throughout the country would benefit small and medium-sized enterprises, which could easily access gas distribution networks.

It would also help replace expensive fuel imports with compressed natural gas, as was already the case in the capital city of Maputo.

“The feasibility of these ventures will depend on the appetite from end-user markets and the competitiveness of transporting gas through pipelines, as opposed to shipping,” said Frost & Sullivan energy and environmental industry analyst Celine Paton.

A developed Mozambican gas market could also supply neighbouring countries, although cross-border supply agreements might trigger complex security issues, she warned.

“Moreover, Mozambican gas may have to compete, in the long term, with Tanzanian gas, as well as potential untapped resources of shale gas, coal-bed methane and coal, not forgetting the emergence of renewable energies in Southern Africa,” she said.

Meanwhile, the report outlined that US gas explorer Anadarko Petroleum and Italian gas group Eni were striving to meet all the conditions necessary to make a final investment decision (FID) on the first phase of an onshore two-train LNG facility by the end of the year or by early next year.

Anadarko was developing a facility with a six-million-ton-a-year capacity for an estimated $26-billion and, last month, selected a consortium, comprising Chicago Bridge & Iron Company, Chiyoda Corporation and Saipem, as the engineering procurement and construction contractor for the initial development of the onshore LNG park.

“Eni, meanwhile, is looking at building two floating LNG units, while hoping to participate in the onshore facility with Anadarko. According to Eni, the Coral South floating LNG facility project is anticipated to reach FID in the second half of the year,” noted Paton.

Moreover, urbanisation projects around Palma, together with an integrated oil and gas logistic services hub in Pemba, were expected to accompany the construction of the LNG facilities in the Cabo Delgado province.

“FIDs on the LNG projects, however, are still pending. A few conditions, such as securing binding gas supply agreements, still need to be met. Additional factors, like lengthy negotiations regarding possible sale of stakes could further delay [projects] to 2016,” she added.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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