JSE-listed gas supplier Afrox has committed a R75-million capital investment to establish and develop a new regional branch in Pemba and an on-site store in Palma, both in Mozambique, over the next few years.
Afrox Mozambique currently has no presence in the northern region of the country, which is what this investment aims to remedy.
“The purpose will be to supply bulk gases, packaged gases and hard goods to the Pemba, Nacala and Nampula regions, where there is already a potential customer base,” Afrox corporate and marketing communications manager Nolundi Rawana tells Engineering News.
The new operational sites will also supply the liquid natural gas (LNG) projects for offshore Area 1 and Area 4, operated by multinational oil and gas companies Total and ExxonMobil respectively.
Afrox says it aims to capitalise on the demand for high-quality and on-time supply of bulk gases, packaged gases and hard goods for the construction, commissioning and ongoing operation and maintenance of the onshore and offshore natural gas facilities in the region.
Moreover, the final investment decision by Total for two onshore LNG trains amounting to 12.9-million tonnes a year was taken mid-2019 and construction will ramp up towards the end of this year.
Therefore, the investment in Afrox Mozambique’s resources, facilities, cylinders and vehicles to support these natural gas projects must be in place towards the latter part of this year as well, Rawana says.
The decision for Afrox to invest in the new facilities comes on the back of more than 185-trillion cubic feet of natural gas reserves being discovered near the coast of northern Mozambique.
Total, ExxonMobil and multinational oil and gas company Eni will extract and process much of the natural gas for export, while some will be made available in Mozambique for domestic gas projects, including gas-to-liquids, fertiliser and power generation projects.
With the initial investment by these multinationals from 2020 to 2025 amounting to about $60-billion, it is envisaged that these projects will elevate Mozambique to fourth- or fifth-largest LNG producer in the world, which will result in Mozambique’s gross domestic product rising by about 8% to 10% a year in real terms over the next 30 years.
“It is, therefore, a transformational opportunity for Mozambique as a country. It is also a good opportunity for Afrox Mozambique to establish a regional presence in northern Mozambique on the back of these massive natural gas construction projects and future domestic gas projects,” Rawana concludes.