Ports on the southeast coast of Africa are competing to capture a share of the huge traffic generated by the construction of liquefaction trains by French oil major Total.
Deadly attacks in Palma since March 24, just 10 kms from Afungi where Total’s two liquefaction trains (12.9 million tons per year) are being built, have forced the French oil major to suspend its operations there. One likely consequence of these security threats is that subcontractors may turn to ports outside Mozambique that are considered less dangerous.
Located about 80 kilometers from the Afungi peninsula, the Tanzanian port of Mtwara, managed by Juma S. Kijavara, may provide a viable alternative for a portion of the traffic that cannot unload terrible on site due to security reasons or insufficient storage capacity at Mozambican ports.
Dubai-based Korean giant CJ ICM Logistics has already chosen this route by signing a contract with Kijavara to use Mtwara and its storage capacity for material destined for Total’s gas project.
In early March a first vessel unloaded 15,000 cubic meters of equipment from Total’s contractors for the LNG project. The cargo belonged to the construction companies Mota-Engil of Portugal and Besix of Belgium. Together they entered into a $365 million contract last year with Total’s main contractor, CCS, a joint venture between McDermott International, Saipem and Chiyoda.
Although the Total project was suspended in January due to insecurity, a second Mota-Engil/Besix vessel is already planned for April in Mtwara
Mota-Engil and Besix are expected to work long-term with CJ ICM on Mtwara. CJ ICM will be able to transport the material stored at Mtwara, using shallow draft barges, as and when its customer requires. It takes only a few hours by sea to move from Mtwara to Afungi. Although Total’s project was suspended in January due to insecurity, a second Mota-Engil/Besix vessel is already planned for April in Mtwara.
Mtwara’s success in attracting new users rests on the resumption of Total’s activities in Cabo Delgado, which have been halted for the past three months. This came after the Mozambican army assured that it had managed to secure a 25 km strip around the site, just as Patrick Pouyanné, Total’s CEO, requested from President Filipe Nyusi. However, the attacks continued with the latter in Palma being the deadliest and foreigners – mainly South African citizens – killed. Total has begun to evacuate the people stranded there and has once again decided to suspend its activities until further notice.
CJ ICM has a long-term vision
CJ ICM will have more than three years of work on its books thanks to the construction of Total’s LNG trains. Using Mtwara is advantageous because it is virtually empty for three quarters of the year outside of the short cashew nut export period between October and December.
This means that ships do not have to wait offshore for a site to become free, as is the case with most ports in the area, such as Dar es Salaam. Other ports like Palma or Mocímboa da Praia are either risky due to the self-proclaimed jihadist groups in Cabo Delgado since 2017, or, like Pemba or Nacala, are much further away from the Afungi project. Mtwara, since there are no waiting costs, represents a cheap alternative, despite the high storage costs imposed by the Tanzanian authorities.
Total is expected to confirm in the coming weeks that it will use the French island of Mayotte, which lies next to the Comoros, as a logistical fallback area for its Mozambique LNG development. Mayotte is, of course, much less attractive than Mtwara, since it is more than 500 km from Afungi. CJ ICM is also looking to expand its activities in Mayotte. The group is already present in most Mozambican ports, including Maputo, Palma and Pemba.
