Investments in gas exploration in Mozambique may reach US$100 billion

5 December 2014

Exploration of natural gas reserves in the Rovuma sedimentary basin in northern Mozambique may involve investment of about US$100 billion, the chief executive of Portuguese group Galp Energia told Macauhub.

Considering the cost of building a single natural gas liquefaction unit, of about US$8 billion, and reserves so far discovered in the region, Manuel Ferreira de Oliveira estimated that the cost of 12 units could reach US$100 billion, although the value may increase, given other resource exploration projects that may be developed, such as plants for processing gas into liquid fuels (GTL) or thermal power plants.

With 11 companies included in the Area 1 and Area 4 concessions, respectively led by US company Anadarko Petroleum and Italy’s ENI, Ferreira de Oliveira said that for now, the monetization of gas via the process of liquefaction and export to international markets is the agreed approach amongst investors.

In this context, and given that the two blocks share the “greatest of all reserves” discovered so far, which should drive one of the first major projects planned for the region, to be installed in the Afungi peninsula in Palma district, on an area of 7,000 hectares granted by the Mozambican government for this purpose.

Information given on Wednesday by the director of ENI East Africa, Fabrizio Trilli, during the 2nd Mozambican Gas Summit, which ended Thursday, suggested that investors intend to build two natural gas liquefaction units on the Afungi peninsula, where the first production activities should start in 2020.

ENI, which suggests a diversified approach in addition to liquefied natural gas (LNG), as early as 2015 intends to build a power plant with a generating capacity of 75 megawatts, and a gas to liquid fuels (GTL) plant to produce up to 96,000 barrels per day, of which 70 percent will be diesel and 30 percent naphtha.

The Area 1 consortium led by Anadarko Petroleum Corporation (26.5 percent) is also made up of Mozambican state oil and gas company ENH (15 percent), ONGC Videsh Indian groups (20 percent) and BRPL Ventures (10 percent), Japan’s Mitsui & Co (20 percent) and Thai group PTT Exploration and Production (8.5 percent).

In Area 4, in addition to ENI (50 percent), are the China National Petroleum Corporation (20 percent), Korea Gas, Galp Energia, Portugal and ENH, all with 10 percent each. (macauhub/MZ/PT)

MACAUHUB FRENCH