Page 7 - AfrElec Week 45

AfrElec COMMENTARY AfrElec

The Eni chief further asserted that LNG pro-
duced from Mozambican gas would help sup- project in 2016 have made any progress. That is,
port efforts to reduce global emissions. “I think Royal Dutch Shell (UK/Netherlands) has not
that we need Mozambique gas,” he said. “Gas is moved ahead with the planned construction
still a very important contributor to the energy of a gas-to-liquids (GTL) plant in Palma, while
transition for different reasons. Clearly, gas is Great Lakes Africa Energy (UK) has not built a
essential if you are looking at emissions.” gas-fired thermal power plant (TPP) in Nacala.

Domestic disappointments Short-term priorities
Descalzi’s enthusiasm is understandable, given Reconciling these two perspectives is not likely
his propensity for focusing on outcomes in the to be easy.
long run. “Clearly, for such a big investment, we Descalzi’s focus on the long term, even in the
need a long-term view,” he said at the Energy face of all the problems 2020 has caused for the
Intelligence Forum. Nevertheless, other foreign global energy industry, shows that enthusiasm
investors have a different perspective, especially about Mozambique’s potential is not unrea-
with respect to proposals for the use of future gas sonable. At the same time, though, ExxonMo-
production to supply the domestic market. bil’s decision to delay its FID in the face of a
Earlier this month, Zitamar and other pandemic and the failure of multiple domestic
Mozambican news agencies noted that Yara, a gas consumption initiatives show that concern
Norwegian fertiliser manufacturer, had decided about short-term challenges is also warranted.
not to continue lobbying for the right to use In all likelihood, Maputo will have to con-
the government’s share of gas as feedstock for front at least one of these immediate challenges if
a new plant. The firm has been in discussions it wants to move ahead with Mozambique LNG,
with Maputo for the last five years in the hope of the project that has made the most headway. The
striking a deal, they noted. Yara initially had high challenge in question is the insurgency in Cabo
hopes for the project, especially since Mozam- Delgado Province. ASWJ’s attacks and seizures
bique also has reserves of phosphate, which is of territory have already affected the gas sector
needed to produce NPK-type fertiliser. But the by depriving the group of access to Mocímboa
parties have never been able to agree on a price da Praia. Mozambique LNG has indicated that
for the gas, and as a result the Norwegian com- it does not expect this loss to affect plans for
pany has abandoned its plans. launching production in 2024, but that could
Meanwhile, Yara is not the only company to change if the group gains control over larger
suffer disappointment on this front. Accord- swathes of territory in Cabo Delgado. As such,
ing to Zitamar, neither of the firms that won a officials in Maputo would do well to think about
contest for the best domestic gas consumption how to respond to this security issue. ™

Week 45 12•November•2020 www. NEWSBASE .com P7