Page 6 - DMEA Week 33

DMEA COMMENTARY DMEA

Security risks

on the rise in

Mozambique

Militants seize control of Mocimboa da Praia, the
main port of entry for Mozambique LNG supplies.

AFRICA MOZAMBIQUE’S plans for developing off- began filling the government’s coffers.
shore natural gas resources recently took a step But there are obstacles on the path to success
forward, with the signing of a $14.9bn loan deal – and one of them has grown more urgent dur-
WHAT: between multiple banks and the Mozambique ing the last week.

Unrest in northern LNG consortium. The credit will cover most of
Mozambique has the the $20bn that the group expects to spend on Confl ict considerations

potential to affect the upstream activity at the offshore Area 1 and on All of the LNG consortia mentioned above are
Mozambique LNG project. the construction of a gas liquefaction plant and working in northern Mozambique, not far from
associated infrastructure. the border with Tanzania.
WHY: As such, it will put Mozambique LNG, led The area has been restive for some time,
Total and other investors by France’s Total, on the road to beginning gas owing to disputes between the region and the
in LNG projects are likely extraction and LNG production on schedule national government. About three years ago,
to press forward, but in 2024. By extension, it will also help convince though, the unrest began expanding to include
they may have to make other investors and lenders that Mozambican attacks by Islamist groups, including Ahlu Sun-
new transportation and LNG projects – not just ongoing projects such nah Wa-Jamo (ASWJ), which has links to the
security arrangements. as Coral South LNG and Rovuma LNG, both of Islamic State (Daesh).

which will rely on gas from the offshore Area 4, To date, more than 1,000 people have been
WHAT NEXT: but also future initiatives – are worth supporting. killed by the insurgents.

If the conflict drags on Likewise, if additional gas projects go for- The country’s armed forces, known as FDS,

or escalates, the target ward, they will drum up demand for services have been trying to contain the violence and
dates for LNG production that local companies can provide, such as trans- push back against militants seeking to establish
may have to be pushed portation, construction and hospitality. This, an Islamic caliphate.

back. in turn, would allow the Mozambican private They have had limited success, not least

sector to grow and flourish, even as gas revenues because they lack the ammunition and other

P6 www. NEWSBASE .com Week 33 20•August•2020