Page 6 - AfrElec Week 33

AfrElec COMMENTARY AfrElec

Security risks on the

rise in Mozambique

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

MOZAMBIQUE MOZAMBIQUE’S plans for developing off- killed by the insurgents. The country’s armed
shore natural gas resources recently took a step forces, known as FDS, have been trying to con-
WHAT: forward, with the signing of a $14.9bn loan deal tain the violence and push back against militants
Unrest in northern between multiple banks and the Mozambique seeking to establish an Islamic caliphate. They
Mozambique has the LNG consortium. The credit will cover most of have had limited success, not least because they
potential to affect the the $20bn that the group expects to spend on lack the ammunition and other supplies needed
Mozambique LNG project upstream activity at the offshore Area 1 and on to respond effectively. (They have also reported
the construction of a gas liquefaction plant and that the rebels are using residents of the region as
WHY: associated infrastructure. human shields.)
Total and other investors As such, it will put Mozambique LNG, led On August 12, FDS suffered a major setback.
in LNG projects are likely by France’s Total, on the road to beginning gas ASWJ forces succeeded in gaining control of
to press forward, but extraction and LNG production on schedule in Mocimboa da Praia, a port that has been serving
they may have to make 2024. as the main entry point for shipments of equip-
new transportation and By extension, it will also help convince other ment and goods for Mozambique LNG.
security arrangements investors and lenders that Mozambican LNG The port is about 75 km from the site on the
projects – not just ongoing projects such as Coral Afungi peninsula where the consortium is build-
WHAT NEXT: South LNG and Rovuma LNG, both of which ing the onshore plant that will process gas from
If the conflict drags on will rely on gas from the offshore Area 4, but also Area 1.
or escalates, the target future initiatives – are worth supporting. As of press time, neither Total nor the other
dates for LNG production Likewise, if additional gas projects go for- IOCs involved in Mozambican gas projects had
may have to be pushed ward, they will drum up demand for services commented publicly on the takeover of Mocim-
back that local companies can provide, such as trans- boa da Praia. As such, it was not clear whether
portation, construction and hospitality. This, recent events had affected the pace of work on
in turn, would allow the Mozambican private Mozambique LNG’s liquefaction plant.
sector to grow and flourish, even as gas revenues
began filling the government’s coffers. Challenges ahead
But there are obstacles on the path to success Nevertheless, there is likely to be more trouble
– and one of them has grown more urgent dur- ahead. ASWJ, which attacked and occupied
ing the last week. Mocimboa da Praia briefly earlier this year, is
not likely to retreat any time soon. Nor is FDS
Conflict considerations likely to give up, even if it struggles to re-establish
All of the LNG consortia mentioned above are government control in northern Mozambique.
working in northern Mozambique, not far from In the meantime, as long as the fighting
the border with Tanzania. The area has been res- continues, Total and its partners will have diffi-
tive for some time, owing to disputes between culty accessing the port they have been using to
the region and the national government. About import the supplies they need to build its LNG
three years ago, though, the unrest began plant.
expanding to include attacks by Islamist groups, They may have to make new arrangements
including Ahlu Sunnah Wa-Jamo (ASWJ), for supply shipments if the militants retain con-
which has links to the Islamic State (Daesh). trol of Mocimboa da Praia – or if port facilities
To date, more than 1,000 people have been are damaged in fighting between the militants

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