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LNG Production and Exports Could Yield Annual Revenues of 79 Million Dollars by 2027

LNG Production and Exports Could Yield Annual Revenues of 79 Million Dollars by 2027

The Executive predicts that the production and export of Liquefied Natural Gas (LNG) should bring the country an annual average of 5.1 billion meticais (79 million dollars) in tax revenue by 2027.

“It is expected that there will be tax revenue from the production and export of natural gas of around 5 billion meticais in 2025, a figure that should increase in 2027 to 5.1 billion meticais, the equivalent of 0.27 per cent of the estimated Gross Domestic Product (GDP),” said the government in a document approved this month by the Council of Ministers.

Entitled “Medium Term Fiscal Scenario (CFMP) for the 2025-27 period”, released by Lusa, the report explains that the production and export of liquefied natural gas and condensate from Coral Sul should reach 90 per cent of total capacity in 2024 and remain constant until 2027, when a further increase is expected with the start of production at Coral Norte, operating at 20 per cent of total expected capacity.

“The total estimated state revenue for 2025 is 416.4 billion meticais, rising to 488.3 billion meticais in 2027,” he emphasised.

The CFMP also reveals that in 2023, state revenue “did not reach the expected nominal value” of 357 billion meticais, but instead stood at 328.2 billion meticais, emphasising that “the reduction in the growth rate of important sectors of the economy, such as agriculture, fishing, manufacturing, construction, electricity, gas and water, which negatively affected the revenue collection process, contributed to this performance”.

“Other negative factors include the rise in crime in the neighbouring Republic of South Africa, which reduced imports, natural disasters, which limited the movement of people and goods and hindered production, and the effects of the war between Russia and Ukraine,” he points out.

The Medium-Term Fiscal Scenario was drawn up by the government with the aim of “translating strategic development objectives into realistic and sustainable financial projections”, providing “a solid basis for decision-making and the efficient allocation of resources”.

“By projecting public revenue and expenditure for the next three years, financial challenges and investment opportunities can be identified that will help guide effective policies and the efficient allocation of resources,” the document states.

Mozambique has three development projects approved to exploit the natural gas reserves of the Rovuma basin, classified among the largest in the world, all located off the coast of Cabo Delgado province.

“It is expected that there will be tax revenue from the production and export of natural gas in the order of 5 billion meticais in 2025, a figure that should increase in 2027 to 5.1 billion meticais, equivalent to 0.27 per cent of the estimated Gross Domestic Product (GDP)”

Two of these projects are larger and involve channelling the gas from the seabed to land, cooling it in a factory and then exporting it by sea in a liquid state.

One is led by TotalEnergies (Area 1 consortium) and work progressed until it was suspended indefinitely after the armed attack on Palma in March 2021, when the French energy company declared that it would only resume work when the area was safe. The other is the still unannounced investment led by ExxonMobil and Eni (Area 4 consortium).

A third completed, smaller project also belongs to the Area 4 consortium and consists of a floating platform for capturing and processing gas for export, directly at sea, which started up in November 2022.

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