Market and project intelligence firm Africa House will lead a group visit of South African companies to Mozambique in August to explore the business opportunities that will arise from the development of three multibillion-dollar gas projects in the far-flung northern provinces of the Southern African country.
Between 150- to 200-trillion cubic feet of gas has been found offshore the country’s Cabo Delgado province and final investment decisions have already been made for two liquefied natural gas (LNG) projects, the most recent being Anadarko’s Rovuma Area 1 Mozambique LNG project.
The final capital estimate has not been made, but Anadarko has indicated that the project will involve two LNG trains with total yearly nameplate capacity of 12.88-million tons.
Separately, Italian energy group Eni is building the $4.7-billion Coral South floating LNG facility, while Eni and ExxonMobil are making progress on an LNG project based on the Rovuma Area 4 block offshore, which will share infrastructure with Anadarko’s project.
Over the coming two decades it is estimated that more than $100-billion will be invested in the territory as a result of the gas projects and several countries, including Portugal, Brazil and France, are actively mobilising their business communities around the opportunities associated with the projects.
In his recent Budget Vote address, South Africa’s Trade and Industry Minister Ebrahim Patel said there was an opportunity for South African companies to supply R8-billion-worth of goods and services for gas projects in Mozambique, which he said could be partly underwritten by the Export Credit Insurance Corporation.
Africa House market insight and development director Roelof van Tonder tells Engineering News Online that the group visit is being designed to expose South African firms to the scale of the opportunity associated with the LNG, which he believes to be under appreciated currently.
The tour, which will take place in Maputo from August 26 to 30, has the support of the South African government and will expose participants to both public and private stakeholders in the LNG projects.
Besides engagements with high-ranking government officials and Mozambique’s national oil company, Empresa Nacional de Hidrocarbonetos, meetings will also be held with the energy companies leading the projects and their engineering, procurement and construction partners.
“The region in which these megaprojects are to be developed is both rural and remote, which means just about everything that is needed to support the projects – from ports and roads, to housing and retail developments – still has to be built,” Africa House market access and research director Duncan Bonnett explains.
Preparatory work is already under way, with roughly $200-million allocated to the resettlement plans alone.
“In other words, this is not only a game changing prospect for Mozambique, but also a significant business opportunity for South Africa companies, especially those willing to partner with local companies in line with Mozambique’s localisation requirements,” Bonnett adds.
However, South Africa’s proximity to Mozambique is no guarantee of preferential access for South African firms.
“These are world-scale projects and the global business community is gearing up to participate,” Van Tonder warns.
“Unless a ‘South Africa Incorporated’ approach is adopted and the business community becomes more proactive in understanding the opportunity, there is every possibility that South African firms will lose out to their global competitors.”