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South African firms urged to seek LNG contracts in Mozambique
SOUTH AFRICA
Mozambican LNG projects are spurring great interest among South African construction companies.
SEVERAL South African businesspeople said during the Africa Gas Forum in Cape Town last week that their country had the potential to benefit from the development of natural gas resources in Mozambique.
Paul Eardley-Taylor, the head of client coverage for oil and gas in southern Africa at Standard Bank, said at the conference that efforts to use Mozambican fields as resource bases for integrated gas production, liquefac- tion and export projects represented a huge opportunity for South African companies. He noted that international oil companies (IOCs) were planning to build three LNG complexes with a production capacity of 3mn tonnes per year (tpy).
Standard Bank believes that the three pro- jects unveiled thus far will require investments of $65bn, Eardley-Taylor stated. As other schemes reach the final investment decision (FID) stage, total foreign direct investment (FDI) commit- ments could reach $128bn, or “probably more,” he said.
Greg Nichollas, a project development man- ager at Lesedi Nuclear Services, said that gas development in Mozambique might create many openings for South Africa’s construction com- panies, which have been “in the doldrums.” He said he had “no doubt” that South African firms should seek a place “right at the forefront” as the two LNG consortia that have already reached FID stage then award construction and imple- mentation contracts.
There are plenty of “development opportuni- ties for people who are bold,” he said, according to West Cape News. IOCs are looking to build a number of onshore facilities on the Afungi peninsula, but the area lacks the infrastructure needed to accommodate them and their con- tractors, he said. Under these conditions, South
African companies ought to showcase their capabilities with respect to the construction of roads, bridges and other ancillary infrastructure, he said.
Nichollas stressed, though, that South Afri- can construction firms would have to do more than simply offer access to a large pool of low- end labour. “We need to supply quality skills and develop a manufacturing industry in South Africa that can constantly supply these projects,” he was quoted as saying by Creamer Media’s Engineering News. “This is not just about con- struction. We should be able to supply expertise and long-term opportunities and not just low- cost labour.”
He added: “We need to supply the right skills and expertise, which we have – [owing] to Mossgas, our coal industry and nuclear power production – so that we can be part of a world- class operation.”
Chanine Williams, asset management prin- cipal for African Infrastructure Investment Managers (AIIM), also highlighted the poten- tial of infrastructure projects, especially in light of plans by Mozambique’s national oil company (NOC) ENH to establish a “gas city” capable of housing up to 150,000 residents on the Afungi peninsula. According to previous reports, ENH has appointed Italy’s Renco Energy to direct the project, which may require investments of €1.5bn.
“They will need 50 km to 60 km of electrifi- cation transmission lines, 300 km to 400 km of road, while the urban area will need to be con- nected to the rest of Mozambique,” she said. “The need is enormous, with requirements for water and sanitation, housing and healthcare. It presents an opportunity for the private sector to c o m e i n .” ™
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