Mozambique entered the liquefied natural gas (LNG) market with the Coral Sul platform, which in three years has generated revenues, jobs, and opportunities for local businesses. But delays in other megaprojects, security risks, and governance issues expose weaknesses that could undermine the expected benefits. Will the country be able to turn its energy potential into sustainable development? Or will it remain stuck in the natural gas trap?
With proven reserves of over 180 trillion cubic feet of natural gas in the Rovuma Basin (a figure that places it among the largest in the world), the approved exploration megaprojects could already have positioned the country as an energy pillar in Southern Africa and a relevant supplier to European and Asian markets. But only one has moved forward: the launch of Coral Sul, a floating platform (like a city-ship, offshore) for capturing and liquefying gas, operated by Eni, marked Mozambique’s entry into the group of global LNG exporters in 2022. With a capacity of 3.4 million tons per year (mtpa), this project—part of Area 4 of Rovuma’s exploration—became an example of how countries with limited infrastructure can, through FLNG (Floating Liquefied Natural Gas: production, liquefaction, storage, and transfer of natural gas directly on offshore facilities), position themselves in international markets. So successful was the model that it is set to be repeated: in April 2025, the Mozambican government approved the development of Coral Norte, with an additional capacity of 3.55 mtpa and production expected to start in 2028.
The other two onshore projects are not keeping pace. The onshore megaproject led by TotalEnergies (Area 1), announced as the largest private investment in Mozambique’s history, has been suspended since 2021 due to armed insurgency in Cabo Delgado. Although resuming it remains a priority, the latest projections push the start of production to 2032, undermining short-term revenue and macroeconomic impact forecasts. Despite these challenges, major international operators, such as the UAE’s Adnoc, continue to show confidence in Mozambique’s potential. In June 2025, Adnoc acquired 10% of Galp’s project in Mozambique, in a deal that could reach $1.15 billion. The move was seen by the Wall Street Journal as a clear signal that the country is still regarded as a long-term energy bet.
Three Years of Coral Sul: What Has It Brought Us?
In the past three years, Coral Sul has represented an advance in infrastructure and operational capacity, while also becoming a reference point for debates on governance, sustainability, and social integration. The project is a concrete test of the Mozambican government’s and companies’ ability to transform energy potential into economic development and tangible benefits for local communities (despite being located offshore, around 40 kilometers from Cabo Delgado’s coast).
As the platform’s production advances, so too does the expectation about its ability to meet ambitious LNG production targets and drive the long-term strategy outlined in the 2025 Economic and Social Plan and State Budget (PESOE) and the 2025–2044 National Development Strategy (ENDE). The project’s successes and challenges over the coming years will be decisive in determining whether Mozambique is indeed prepared to claim a prominent role in the global energy market.
What Concrete Progress Has Been Made?
According to the 2025–2027 Medium-Term Fiscal Framework (CFMP), LNG revenues from Coral Sul rose 11.8% in 2023 compared to 2022, totaling $73.4 million (approximately 4,688.2 million meticais). This year, the CFMP projects LNG revenues to reach $78.3 million, 60% of which will go to the State Budget and the remainder to the Sovereign Fund. In terms of employment, according to Eni, the project currently employs around 1,400 Mozambicans directly or indirectly, with about 200 Mozambican professionals on board the FLNG unit. In addition, the project has invested around $33 million in training programs for young graduates, aimed at improving skills and preparing them for the job market. In terms of local content and business development, so far Mozambican small and medium-sized enterprises have secured contracts worth around $800 million in Coral Sul.
How to Balance Growth and Risks?
Florival Mucave, president of the Mozambican Chamber of Energy and an influential figure in energy policy debates, argues that gas must be exploited strategically, combining export and domestic use with the aim of industrializing the economy, boosting productive sectors such as agriculture, and creating jobs. Mucave advocates a collaborative platform between the state, private companies, and African experts to ensure that the wealth generated does not slip away from Mozambique’s hands.
This optimism, however, inevitably clashes with the so-called “resource curse.” Oil- and gas-rich countries often experience volatile growth, deep inequality, and weak diversification.
For Mucave, the creation of Mozambique’s Sovereign Fund is a strategic step to shield gas revenues and direct them toward structural investments. However, he warns that other African countries’ experiences show that such funds alone do not guarantee prosperity. What is needed, he says, is strict transparency, clear rules, and solid governance to avoid capture by political interests or short-term use.
The big question, according to him, is not merely the fund’s existence, but whether the country will be able to manage it with fiscal discipline, long-term vision, and focus on concrete results that sustainably benefit the economy and population.
Gas as an Energy Bridge or Trap
Mucave stresses the importance of finding balance in the global debate on energy transition. Mozambique cannot give up fossil fuels prematurely, especially when firewood remains the main energy source for millions of families. Natural gas, according to the expert, should be seen as a transitional energy, capable of generating immediate revenues, ensuring broader electrification, and supporting industrial growth. This strategy, however, is risky: prolonged dependence on fossil fuels could delay the adoption of renewables and hinder more ambitious environmental commitments.
He argues that the challenge now is to use gas as a bridge toward a more diversified and cleaner energy matrix, with simultaneous investments in solar, wind, and other sustainable solutions (which, fortunately, are already beginning to emerge), preventing the country from being trapped in an energy model that may lose relevance in the coming decades.
Urgency in Exploration
In this context, Mucave calls for an urgent approach—akin to the famous “drill, baby drill” political slogan that emerged in the U.S. in 2008 encouraging oil drilling. He believes that in a context of structural poverty and the need for industrialization, accelerated gas exploitation is imperative. The challenge lies in reconciling this urgency with factors such as international price volatility, environmental pressures, and instability in Cabo Delgado—all of which could undermine the sector’s sustainability.
Short Term: Revenues and Sovereign Fund
This year, the government expects LNG revenues to reach $78.3 million, of which 60% will go to the State Budget and the remainder to the Sovereign Fund, created to manage extraordinary revenues from natural resources. The Sovereign Fund will play a crucial short-term role, with plans to finance 15 strategic projects, including 12 new secondary schools. If implemented, this could demonstrate government action capable of translating gas exploitation into social development and human capacity building—though criticism persists about transparency, particularly regarding $165 million in gas revenues between 2022 and 2024 that were omitted from the 2025 PESOE.
Medium Term: Institutional Strengthening
In the medium term, the government plans to strengthen the role of the National Hydrocarbons Company (ENH), equipping it with capacity to directly operate gas projects and represent the state’s interests. Currently, ENH participates in 10 concessions, but the plan is to expand this presence to ensure greater control over strategic investments and promote technology and knowledge transfer.
Moreover, the 2025 PESOE foresees that revenues from the oil and gas sector, estimated at about 3,000 million meticais (around $46.5 million), will be applied to priority infrastructure, aligning energy investment with the country’s economic and industrial expansion.
Long Term: Economic Transformation
The long-term vision, enshrined in the 2025–2044 ENDE, reiterates yet-to-be-fulfilled promises: it points to the exploitation of energy resources, including natural gas, as a central axis for Mozambique’s industrialization and economic transformation. This vision implies maximizing fiscal revenues and integrating the energy sector with sustainable development policies, the creation of qualified jobs, economic diversification, and the promotion of strategic public-private partnerships.
The government views natural gas as an engine capable of putting Mozambique on the global energy map, attracting international investment, strengthening the domestic value chain, and ensuring that the benefits of exploitation reach local communities and the state in a balanced way.
Despite optimistic projections, the government acknowledges the problems the country faces: delays in onshore megaprojects, security risks in Cabo Delgado, infrastructure limitations, and the need for solid governance in resource management. To mitigate these risks, the 2025 PESOE and the ENDE stress the importance of strategic alignment, transparency, local content integration, and ESG (environmental, social, and governance) principles in gas projects.
Civil Society’s Major Concerns
Mozambique’s civil society closely follows the development of the natural gas sector, highlighting it as an opportunity:
- Economic potential: natural gas, especially from the Coral Sul project, is seen as an opportunity to generate significant revenues, create jobs, and strengthen the national economy.
- Social focus: allocating 40% of revenues to the Sovereign Fund for strategic projects, such as schools and social infrastructure, is recognized as a positive step in linking energy resources to tangible population benefits.
- Alignment with technical recommendations: many PESOE guidelines align with expert recommendations, such as transparency, solid governance, and local content integration.
Civil society organizations also point out weaknesses and risks that may undermine the plan’s execution:
- Transparency and oversight: there is concern about the management of Sovereign Fund resources, especially given omissions in previous years’ revenues ($165 million between 2022–2024).
- Institutional capacity: doubts remain as to whether ENH and other state bodies have the technical and administrative capacity to operationalize large-scale gas projects.
- Social and environmental risks: impacts on local communities and ecosystems, as well as the need for robust environmental mitigation policies, remain gaps to be addressed.
- Dependence on external factors: volatility in international markets, delays in megaprojects, and security risks in Cabo Delgado could jeopardize established targets.
Ultimately, these positions reveal that the sector’s success will depend not only on the scale of investment but also on the ability to transform revenues into inclusive progress.
Celso Chambisso • Photo: D.R.
