The two largest natural gas exploration projects in Mozambique are likely to be postponed due to an impending oversupply in the world market, energy consulting firm Wood Mackenzie has warned.
About 200 trillion cubic feet of natural gas were recently discovered in the Rovuma basin by two consortia led by US company Anadarko Petroleum and Italy’s ENI, which are undertaking surveys on adjacent oil blocks.
Speaking to Mozambican news agency AIM, Noel Tomnay, vice president for the natural gas sector at Wood Mackenzie, warned “there is a feeling that, with the slowdown in the growth prospects of liquefied natural gas, a window of opportunity may have been lost.”
Tomnay said the major buyers of natural gas in Asia appear to be in no hurry to conclude new contracts because there will soon be an oversupply after the completion of projects that are already in the implementation phase.
A study by Wood Mackenzie showed that the global supply of LNG hovers around 250 million tons per year and there is additional capacity for production of 140 million tons per year, which are currently under construction.
Anadarko Petroleum has been trying to secure contracts for the sale of 12 million tons of LNG per year produced at its project in the Rovuma basin, which it hopes to open in 2020.
The director of Anadarko in Mozambique, John Peffer, told financial news agency Bloomberg that that company had already secured the advance sale of 90 percent of production, which it needs to proceed with the natural gas liquefaction project. (macauhub/MZ)