Page 4 - AfrOil Week 40 2019

AfrOil COMMENTARY AfrOil
Mozambique moving forward with LNG
With MRV’s initial investment decision and EPC contract award, the African state has taken a step towards becoming a major player on global gas markets
WHAT:
ExxonMobil and its partners are set to spend $500mn on onshore construction and $9.2bn on the building of a gas liquefaction plant.
WHY:
MRV’s plans represent the biggest private investment project in Africa.
WHAT NEXT:
Progress on the Mozambique LNG deal should help President Filipe Nyusi win re- election on October 15, despite a change in schedule.
MOZAMBIQUE took a big step towards becoming a major player in the world’s natural gas industry this week.
On October 8, the country’s government hosted a ceremony at which the US giant Exx- onMobil said it was ready to invest more than $500mn in the initial phase of construction work on the Rovuma LNG project, which calls for using production from the deepwater block known as Area 4 as feedstock for a gas liquefac- tion plant.
Peter Clarke, ExxonMobil’s head of power and gas marketing, confirmed the company’s initial investment decision at the ceremony in Maputo. “The Area 4 partners will advance midstream and upstream area project activities of more than $500mn as initial investments,” he said.
Clarke also revealed that ExxonMobil and its partners in the consortium known as Mozam- bique Rovuma Ventures (MRV) had selected a contractor for engineering, procurement and construction (EPC) work on the project. Specif- ically, he said MRV had tasked a group set up by JGC (Japan), Fluor (US) and Technip FMC (UK) with constructing the LNG complex’s onshore facilities. This group will help build a two-train LNG plant with a production capacity of 15.2mn tonnes per year and associated infra- structure, he said.
He put the value of the EPC deal at $9.2bn.
That would make it the biggest private-sector investment contract in Africa.
Full project deadlines
The initial agreement and the EPC contract that were unveiled this week cover only part of the project.
ExxonMobil is not just looking to build some onshore facilities and a larger gas liquefaction plant. It is also looking to carry out upstream development operations at Area 4, which con- tains more than 2.4 trillion cubic metres of gas, and build a pipeline to move gas from the off- shore field to the onshore plant. It is these activi- ties, in combination with the construction of the LNG plant, that are likely to bring the total price tag for the project up to $27-33bn.
MRV is not quite ready yet to commit to spending that much. In fact, the consortium has made a vigorous effort over the last week to quell speculation about the possibility that it might make a final investment decision (FID) on the full project at the ceremony in Maputo.
Up until very recently, though, it was still sig- nalling that it intended to reach the FID stage
by the end of this year, as previously stated. On October 7, LNG World News quoted Mark Hackney, MRV’s midstream managing director,
as saying that the initial investment decision was
an important milestone along the path to FID
later in 2019. 
Rovuma LNG is one of three integrated gas projects in Mozambique (Image: Anadarko Petroleum)
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w w w . N E W S B A S E . c o m Week 40 09•October•2019