Maputo, Aug. 28, 2024 (Lusa) — The Rovuma LNG consortium, led by US oil company ExxonMobil, has begun the basic engineering phase in Area4 of the Rovuma Basin, northern Mozambique, to explore for natural gas, the government announced on Wednesday.
Mozambique's Ministry of Mineral Resources and Energy said in a statement that the consortium had proceeded to award and sign "competitive contracts" for the engineering, procurement and construction of the project.
"This phase, which should last approximately 16 months, represents the last stage before the final investment decision is made," the statement said.
Mozambique's minister of mineral resources and energy, Carlos Zacarias, considered the development of the Rovuma LNG Project to be a sign that this structuring endeavour is taking shape.
"We encourage the concessionaires to continue to take firm steps towards obtaining the associated costs that will make it a reality," said Mr Zacarias, quoted in the document.
ExxonMobil Mozambique president Frank Kretschmer said the award and execution of the FEED [basic engineering] contracts are a significant step towards developing the "world-class Rovuma LNG" project.
Kretschmer, also quoted in the note, added that ExxonMobil will continue to work with the government of Mozambique to maximise the benefits that the project will create for the country.
The Rovuma LNG Project will produce, liquefy and sell natural gas from reservoirs in the Area 4 block of the Rovuma Basin and includes the construction of 12 modules of 1.5 million tonnes per year each.
"The modular and electric design of Rovuma LNG, with prefabricated modules to be assembled in Afungi, is expected to increase the competitiveness and flexibility of the project and the design will reduce greenhouse gas emissions," the statement said.
President Filipe Nyusi said after a meeting with Liam Mallon, the president of ExxonMobil Upstream, that the US oil company ExxonMobil plans to make a decision on the natural gas extraction project in northern Mozambique only in 2026.
"We focused our discussions on the initial engineering phase of the project, now with plans to finalise approvals and make the final investment decision by 2026. With significant progress, it has been reiterated that this project will be one of the least polluting initiatives with all the potential for a promising future in the liquefied natural gas sector," Nyusi explained.
The Rovuma LNG Project plans to produce 18 million tonnes of liquefied natural gas (LNG) onshore per year.
Area 4 is a concession contract for exploration and production in northern Mozambique, 70% of which is held by MRV, an ExxonMobil, Eni and China National Petroleum Corporation entity.
The remaining stakes are held by ENH, KOGAS and Galp, with %10 each.
Mozambique has the third largest natural gas reserves in Africa.
The country currently has three development projects approved to exploit the natural gas reserves in the Rovuma basin, which is classified as one of the largest in the world, off the coast of Cabo Delgado.
Two of these projects are larger in scale and involve channelling the gas from the seabed to land, cooling it in a plant and exporting it by sea in a liquid state.
One is led by TotalEnergies (Area 1 consortium), and work progressed until it was suspended indefinitely after an armed attack on Palma in March 2021. The French energy company declared that 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, onshore). The Italian oil company has another offshore site already practically in full production.
PMA/ADB // ADB.
Lusa
