Page 4 - GLNG Week 12 2023

GLNG COMMENTARY GLNG

ExxonMobil considers resuming

and expanding Mozambique’s

Rovuma LNG project

Rovuma LNG has experienced a roller-coaster ride so far, and additional hurdles will

need to be cleared, but steps are being taken in the right direction and it could mark
a transformative phase for Mozambique.

MOZAMBIQUE EXXONMOBIL is contemplating restarting the also need to show compliance with UK and US
Rovuma LNG project in Mozambique’s restive anti-corruption practices.
WHAT: Cabo Delgado Province in the country’s north. “Only the candidates providing the FEED
Amid signs of improving The company has called for expressions of inter- will be considered in a potential next stage for
security in Cabo Delgado, est (EoIs) to design and construct the LNG plant the award of an EPC contract,” Exxon said in a
Exxon has called for in a statement published in the Mozambican statement. This is “subject to improvement of
expressions of interest newspaper O Pais on March 17. security conditions and a decision on return of
to design and build The onshore LNG project was first approved activities in the Afungi area”.
an onshore LNG plant by the government of Mozambique in June 2019.
producing up to 18mn tpy, Initial plans were that the Rovuma Mozambique A financial lifeline
an increase on earlier LNG project would produce, liquefy and market For Mozambique, getting the stalled LNG pro-
plans for 15.2mn tpy. natural gas from three reservoirs of the Mamba jects back on track is imperative as the country
complex in the Area 4 block in the offshore faces financial struggles. LNG export revenues
WHY: Rovuma Basin. With the construction of two would be a huge boon for the southern African
Following signals that liquefaction trains, the project was envisaged to country in servicing its debt, which includes a
TotalEnergies will have a nameplate capacity of 15.2mn tonnes per $900mn Eurobond.
resume work on nearby year (tpy). In fact, it’s believed the potential invest-
Mozambique LNG this However, the project has been stalled since ments in the LNG projects exceed the country’s
summer, Exxon appears April 2021 following terrorist attacks in the national annual output. Initial investments for
ready to follow suit by region, which forced the nearby Mozambique Rovuma are predicted to be around $500mn to
restarting the Rovuma LNG project operated by TotalEnergies to advance midstream and upstream early project
LNG plant. The two declare force majeure. But the security situation activities, including development of a construc-
projects are considered has now improved slightly with foreign peace- tion camp, resettlement activities, building an
crucial for Mozambique keeping forces deployed to the region. TotalEn- airstrip and access roads, and detailed engineer-
to pay its debt. ergies also sent an independent mission with ing of the LNG plant.
chairman and CEO Patrick Pouyanne to evalu- Mozambique began exporting its first LNG in
WHAT NEXT: ate the humanitarian and security situation. November 2022 from a floating vessel offshore
Following the tender for With signs of optimism for the security con- moored on Area 4. Known as the Coral Sul
front-end engineering ditions, TotalEnergies announced in February floating LNG (FLNG) unit, the project, in which
and design work, a that it is considering restarting its LNG export Exxon is part of a consortium with Italy’s Eni, is
candidate will be project, and now Exxon has followed suit. Amid capable of producing 3.4mn tpy.
chosen for engineering the improved backdrop, Exxon also announced
procurement and it is now planning for the facility to be capable Overcoming hurdles
construction work. A of producing 18mn tpy, a considerable increase With confidence growing around the security
final investment decision from plans in 2019. situation, the next obstacle to overcome for the
is still required, so the The call seeks front-end engineering and Rovuma project is financing. While Mozam-
earliest that Rovuma design (FEED) work for the project that will fea- bique LNG has already obtained $14.9bn of pro-
would deliver LNG would ture a number of 1.5mn tpy liquefaction mod- ject financing, Rovuma has not yet made a final
be 2027. ules, with EoIs due by March 31. Bidders will investment decision (FID), and this could prove

P4 www. NEWSBASE .com Week 12 24•March•2023