The consultancy Fitch Solutions last week estimated that gas production in sub-Saharan Africa will rise from 80.5billion cubic metres to 135.2 in 2032, with Mozambique being one of the main exporters.
“Our outlook for the evolution of natural gas production in sub-Saharan Africa is positive; we expect production to increase from the current 80.5 billion cubic metres to 135.2 billion cubic metres in 2032, with the biggest area of investment in the region in the coming years being the expansion of liquefied natural gas [LNG] export capacity,” the analysts wrote.
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In a report on the natural gas sector in the region, sent to clients and to which Lusa had access, these analysts from the consultancy owned by the same owners of Fitch Ratings highlight Mozambique, but also Nigeria, Mauritania and Senegal, as the main drivers of the rise in production and export of natural gas.
“Eni’s FLNG Coral project is the first of three projects planned for Mozambique, and came on stream last year, positioning Mozambique as a net LNG producer and exporter,” they write, warning, however, that the insecurity situation in the north of the country continues to pose a major risk to the return of TotalEnergies’ operations and ExxonMobil’s final Investment decision.
“We anticipate TotalEnergies’ first gas to begin production in 2026 and ExxonMobil’s final investment decision to occur this year, with first production in 2027,” they write, adding, still, that “uncertainties over the resolution of insurgent attacks put these forecasts increasingly at risk.”
The sub-Saharan African region is “well positioned to benefit from increased demand for its gas”, they stress, recalling the consequences of Russia’s invasion of Ukraine and the willingness of Europeans to diversify sources of gas purchases, seeking to move away from Russian gas.
In this context, Nigeria will be key, as it will account for almost half of the region’s domestic gas demand, which needs more infrastructure to boost demand from its local inhabitants, something policymakers have already realised and are trying to address, Fitch Solutions notes.
“Natural gas infrastructure expansion is crucial to boost demand in the region; some markets in the region are slowly making progress in this regard,” they say, pointing to the example of Mozambique, which plans to build from early this year a “gas import terminal in the south [Matola LNG] that would give the country a reliable source of gas supply to secure growing demand.”
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In the note, the analysts conclude that “although there will be substantial upfront costs in the construction phase, expanding the liquefied natural gas import infrastructure is essential to unlock demand for natural gas in the region” and boost exports.
Mozambique has three development projects approved to exploit the natural gas reserves in the Rovuma basin, ranked among the largest in the world, off the coast of Cabo Delgado.
Two of these projects are larger and envisage channelling the gas from the seabed to land, cooling it in a plant to export it by sea in a liquid state. One is led by TotalEnergies (the Area 1 consortium) and work was progressing until it was suspended indefinitely after an armed attack on Palma in March 2021, when the French energy company said it would only resume work when the area was safe.
The other is the still unannounced investment led by ExxonMobil and Eni (Area 4 consortium).
A third completed and smaller project also belongs to the Area 4 consortium and consists of a floating platform to capture and process gas for export, directly at sea, which started up in November 2022.
The floating platform is expected to produce 3.4 mtpa (million tonnes per year) of liquefied natural gas, Area 1 points to 13.12 mtpa and the onshore plan for Area 4 envisages 15 mtpa.
Cabo Delgado province has been terrorised since 2017 by armed rebels, with some attacks claimed by the extremist group Islamic State.
The conflict has led to more than 4,000 deaths, according to the ACLED conflict registration project, and more than a million thousand displaced people, according to Mozambican authorities.
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Since July last year, an offensive by government troops with support from Rwanda, later joined by the Southern African Development Community (SADC), allowed for an increase in security, recovering several areas where there was rebel presence, including the town of Mocímboa da Praia, which had been occupied since August 2020.