(2015-06-09) Gas-rich Mozambique has the potential to become an LNG hub, mainly driven by efforts by Anadarko Petroleum Corporation and Eni SpA to monetize the hydrocarbon sector by early 2016, stated a Frost & Sullivan analysis.
SPTEC Advisory, in 2013, stated that Mozambique has 28.3 trillion cu/m of natural gas reserves.
Global consultancy Frost & Sullivan has released a new report titled Mozambican Gas Sector: Major Opportunities Across Multiple Industries, which has considered the range of monetization strategies such as LNG export terminals, gas-to-power projects and possibly, petrochemical plants as well, all of which could unlock the country’s natural gas production capability.
Specifically, efforts undertaken by American hydrocarbon explorer Anadarko Petroleum Corporation and Italy’s Eni SpA are focused on meeting all conditions needed to reach a final investment decision by the end of 2015 or latest by early 2016.
The implementation of plans for LNG export facilities, in particular, will catalyze massive energy and infrastructure opportunities over the next five to 10 years, said analysts.
Frost & Sullivan energy and environmental industry analyst Celine Paton said, “Anadarko is developing a first phase onshore two-train LNG facility with a capacity of six million metric tonnes (MT) per annum, for an estimated US$26bn. Last month, the company selected a consortium comprising of Chicago Bridge & Iron Company, Chiyoda Corporation and Saipem SpA as EPC contractor for the initial development of the onshore LNG park.”
Additionally, Paton added, Eni is also looking at building two floating LNG units, hoping to participate in the onshore facility with Anadarko. According to Eni, the Coral South FLNG project is anticipated to reach a final investment decision in the second half of 2015.
The two oil and gas companies are also anticipating projects such as an urbanisation project around the Mozambican town of Palma, together with an integrated oil and gas (O&G) logistic services hub in the port city Pemba. Together, they are expected to accompany the construction of LNG facilities in the Cabo Delgado Province – one of the least developed provinces in Mozambique that would provide investment opportunities within the oil and gas construction industry.
Though the report discusses Mozambique’s ambitious gas extraction plans, it has also added that lengthy government and contract negotiations could likely hamper progress.
“While addressing regional demand for natural gas would be ideal for Mozambique, cross-border supply agreements might trigger complex security issues. Moreover, Mozambican gas may have to compete in the long term with Tanzanian gas, as well as potential untapped resources (shale gas, coal-bed methane, and coal, not forgetting the emergence of renewable energies) in southern Africa,” revealed Paton.
If the Mozambican government succeeds in creating an investor-friendly climate and the global market conditions render projects economically feasible, gas infrastructure will flourish in the next 15 to 20 years, leading to a boom in the Mozambican gas sector, the report concluded.
Source: Oil Review
Photo: Flickr / Construction of LNG export terminals, gas-to-power projects and petrochemical plants could unlock Mozambique’s natural gas production capability.
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