Mozambique’s gas “has the potential to meet regional and international demand,” according to the African Chamber of Energy, which also says that delays in developing gas projects caused by political instability in the country continue to hold back expansion of the targeted market.
Growth in Mozambique’s gas market in 2022 and beyond will be a game changer for the African hydrocarbons market and will help put the continent on a trajectory to become a global energy hub, according to the African Energy Chamber’s outlook.
At a time when gas production across Africa needs to increase to meet growing energy demand, factors such as inadequate financing in new exploration and production (E&P) activities and declining production in old projects are challenging the ability of African hydrocarbon producing countries to expand gas production.
“However, large-scale projects and investments made in Mozambique, with its 100 trillion cubic feet of reserves, can help expand the gas market in Africa,” newspaper O País points out.
According to the African Energy Chamber, supply and demand levels between 2022 and 2025 suggest that there is sufficient supply of Liquefied Natural Gas (LNG) to meet growing demand as new projects come online this year, such as the Coral Floating Liquefied Natural Gas (FLNG) project in Mozambique.
Coral FLNG, comprising approximately 450 billion cubic metres of gas at the Coral South Field in Area 4 in the Rovuma Basin off the coast of Mozambique, will enable the country to produce 3.4 million tonnes per annum (mtpa) of gas for export to Europe and Asia by 2022.
In addition, TotalEnergies Mozambique’s 12.8 mtpa LNG and Eni and ExxonMobil Rovuma’s 15.2 mtpa LNG projects have the potential to transform the regional gas market, positioning Mozambique as a highly competitive gas exporter. Although both projects have been delayed, progress is being made to get them back on track.
According to the Energy for Growth Centre, Mozambique’s gas, with the right policies and investments in place, could bring in $50 billion in foreign investment and allow the government to reap $95 billion in revenues over the next 25 years, as well as an attractive policy environment for capital.
The United Nations Development Programme advises that Mozambique can also use its energy reserves to reduce energy poverty, as the percentage of its population living without access to reliable energy continues to rise from 19.6 million in 2007 to over 21 million in 2017.
According to the chief executive of the African Energy Chamber, NJ Ayuk, Mozambique’s gas reserves have the potential to combat energy poverty across the southern African region by helping neighbouring countries such as Zimbabwe, Botswana, Malawi and South Africa meet the demand for gas.
In addition, TotalEnergies Mozambique’s 12.8 mtpa LNG and Eni and ExxonMobil Rovuma’s 15.2 mtpa LNG projects have the potential to transform the regional gas market, positioning Mozambique as a highly competitive gas exporter. Although both projects have been delayed, progress is being made to get them back on track.
“However, political instability in the country and lack of investment in enabling infrastructure will need to be addressed for Mozambique to become one of the world’s top ten LNG exporters,” NJ Ayuk said.
Despite having vast gas reserves, Mozambique’s progress in development and monetisation remains slow. This highlights a growing need for the Government to create an enabling policy environment that allows investors and large international companies to participate in the market.
