IMF sees LNG as a boon for Mozambique’s economy

The International Monetary Fund (IMF) said December 21 that the economy of Mozambique is expected to accelerate as soon as LNG production picks up.

There are several large-scale LNG projects underway in Mozambique's gas-rich north, although none of them have reached first gas yet. Italy's Eni is set to commission the 3.4mn metric ton/year Coral South FLNG at Area 4 in 2022, whereas TotalEnergies' 13.1mn mt/yr Mozambique LNG has suffered delays due to security concerns and is expected to start up in 2024.

ExxonMobil is looking to develop the 15.2mn mt/yr Rovuma LNG terminal, but is yet to take a final investment decision.

The IMF said it expected Mozambique's gross domestic product to grow by 2.2% this year, a recovery that followed the first contraction in 30 years in 2020. Overall growth is expected to accelerate “sharply” as more LNG projects begin production.

Discounting LNG, the IMF projects long-term growth at around 4% for Mozambique.

“Vulnerability to natural disasters and the effects of climate change are a recurrent vulnerability, as is renewed deterioration of the security situation that could further delay or stop the LNG projects,” the IMF added.

The IMF said that, if the sector is well managed, however, Mozambique’s wealth in natural resources should support the nation’s development.

“Higher growth and fiscal revenue from LNG would provide scope for investing in health, education and social protection, climate change adaptation, and paying down public debt,” the IMF stated.