[NGW Magazine] Mozambique: ‘the new Qatar’

Mozambique may exceed expectations as it develops its LNG industry, a Galp executive has said. “With the right conditions, it could become the new Qatar of the world,” Thore Kristiansen, chief operating officer for upstream at Portugal’s Galp Energia told the Africa E&P conference May 24.

Galp holds 10% equity in Area 4 offshore Mozambique, so is part of both the Eni-led Coral South FLNG project and the eventual onshore Mamba LNG to be operated by ExxonMobil.

Kristiansen said that under Galp’s original business plan for Area 4, the Mamba project was to comprise six onshore liquefaction trains, each of 5mn mt/yr capacity.

“But now we may develop bigger trains, with ExxonMobil onboard,” the Galp executive told his London audience.

Kristiansen also said that Mozambique’s energy minister Ernesto Max Tonela formally approved ExxonMobil’s entry into the Area 4 consortium on May 18. The US supermajor completed its $2.8bn acquisition of half Eni’s 50% stake five months earlier. ExxonMobil also built the Qatari LNG industry.

Area 4 partners are now looking to have their plan for development and operation approved by the end of this year; this may imply a final investment decision (FID) in early 2019.

Mozambique LNG (Anadarko) in February 2018 secured government consent to develop two onshore trains at Afungi, totalling 12.88mn mt/ry. Anadarko believes a FID can be achieved this year, while one of its LNG offtakers, the French utility EDF, told NGW it is confident that supplies could start in 2023.

Kristiansen declined to discuss recent reports that ExxonMobil-led Mamba might overtake the timeline for the Anadarko-led Mozambique LNG project (using offshore Area 1 gas), when he spoke to NGW, but recalled ExxonMobil has talked of its ambition for a 40mn mt/yr Mamba project.

It could be many years before the LNG projects site at Afungi is fully developed.

However, the site is understood to have space for some 50mn mt/yr of liquefaction capacity, to be shared between Mozambique LNG and Mamba. So the remarks from ExxonMobil and now Galp suggest that reticence over investing in Mozambican LNG projects is receding – as oil and gas prices recover and the outlook for LNG demand into the 2020s brightens – and is gradually being replaced by some gentle sparring between the rival projects about the time it will take to develop the Afungi site.

Mark Smedley