At a time when western oil firms are leaving Nigeria, the American energy giant Exxon Mobil Corporation is attempting to relaunch its massive gas project in Mozambique. If successful, this move might lead to an investment of more than $100 billion.
Exxon requested expressions of interest to design and construct an LNG facility capable of producing up to 18 million tons of LNG annually in a statement that appeared last week in the Mozambique newspaper O Pais. A 15.2 million-ton project was originally planned, but Exxon and its potential partners are now looking to increase their stake in light of better fiscal terms that highlight how egregiously Africa’s top oil producer is failing to retain or attract investment into a once-profitable oil industry in a country with 200 million citizens.
Exxon’s announcement comes after TotalEnergies SE said last month that it’s considering restarting its own LNG export venture in Mozambique’s Cabo Delgado province. The projects were halted two years ago following an attack on the town of Palma, but a mix of local and foreign troops have since made progress in containing the violence that’s left more than 4,600 people dead.
With prospective investments that are more than Mozambique’s yearly output, the LNG projects provide a lifeline for the country’s struggling economy.
The first LNG output from Mozambique was shipped from a floating ship offshore in November thanks to a partnership between Exxon and the Italian company Eni SpA. The yearly capacity of said plant is 3.4 million tons.
According to the company’s statement, modules weighing 1.5 million tons would be used in the considerably larger onshore project that is planned. Expressions of interest must be submitted by the end of this month.
“Modular is attractive and potentially the best solution in Mozambique from the standpoint that it offers the opportunity to build at scale while also mitigating some of the security risks during construction,” said Alex Munton, director of global gas service at Rapidan Energy Group.
The Mozambique government expects to pocket about $96 billion over the next quarter-century from three liquefied natural gas plants that would turn Mozambique into a leading exporter of the fuel.
Mozambique, which is desperate to avoid pitfalls like those holding Nigeria down, will establish a sovereign wealth fund to manage the income, which could go a long way toward improving roads and ports and access to health and education.
As much as $120 billion in investment could be heading to Mozambique, according to Standard Bank Group Ltd., Africa’s largest lender.
Over two-thirds of Mozambique’s 32 million people live on less than $1.90 per day; thus, the planned gas projects are anticipated to be a game-changer not just for Mozambique but maybe for neighboring nations as well. In addition to giving the state’s finances a huge boost, it would also generate thousands of construction jobs. Aside from addressing ongoing electricity shortages, gas production may also increase fertilizer production, which will increase agriculture yields.
After an uptick in attacks by Islamist rebels caused the suspension of Africa’s largest private investment in April 2021, Total imposed force majeure on its multibillion-dollar LNG project in Mozambique.
