Mozambican President Filipe Nyusi said in Washington on Thursday that the liquefied natural gas project undertaken by a consortium headed by the American company Anadarko in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, is on the right path, and by the end of the year key decisions should be taken so that the consortium can advance with financing an implementation.
The relative delay in this project, Nyusi told the reporters who had accompanied him to the United States, is to do with the fact that there are many stakeholders involved and the need to protect the interests of all the parties.
“As a government, we don’t feel relaxed when things don’t happen”, said the President. “And they have to happen speedily, but carefully, because major undertakings such as the natural gas project cannot be handled in a simplified manner”.
He admitted “we have already made mistakes, and we must not make any more. Hence the process will take time”.
He stressed that, in the case of the Anadarko project, questions such as the resettlement of villagers living in the Afungi Peninsula, where the liquefied natural gas plants, will be built must be looked after. So must the construction of supporting infrastructures, necessary for the entire value chain.
Anadarko is the operator in Rovuma Basin Area One, and unlike the Italian energy company ENI, which is the operator in the adjacent Area Four, it has opted to process the natural gas onshore. The ENI-led consortium has already taken its Final Investment Decision and is committed to installing a floating liquefied natural gas (FLNG) unit above the Coral South gas field in Area Four. Production from the FLNG unit is expected to begin in mid-2022.
There is no such deadline yet for Anadarko and Area One. Nonetheless Nyusi was confident that important advances have been made, notably in his meeting on Thursday with the chairperson and Chief Executive Officer of Anadarko, Al Walker. The consensus achieved there will now be discussed at Mozambique’s Council of Ministers (Cabinet).
Not only the government and the National Petroleum Institute (INP) will be involved in the procedures, Nyusi pledged, “but also all the other stakeholders”.
After his meeting with Nyusi, Walker told reporters that a series of legal questions must still be solved, but he was optimistic that these matters could soon be dealt with.
A series of contracts were signed between Anadarko and the Ministry of Mineral Resources and Energy in May.
According to an INP press release, one is an addendum to the original concession contract for petroleum exploration and production. The addendum seeks to align the contract with the decree on LNG approved by the government in December 2014, which approves the special legal and contractual regime applicable to LNG projects in Areas One and Four of the Rovuma Basin.
The second contract concerns the government’s share of the LNG from Area One. The government pledges “the dedicated and joint sale, so as to obtain the greatest volume of sales, competitiveness and consequently the greatest return of revenue for all parties”.
Finally, the government and Anadarko signed a Memorandum of Understanding on the supply of gas for the domestic market. The government has negotiated with Anadarko the supply of 400 million cubic feet of gas a day throughout the expected 25 year life span of the Golfinho/Atum gas fields in Area One.
These contracts, the INP release says, “express the government’s commitment to guaranteeing implementation of the LNG projects within the time frame agreed with the concessionary companies”.