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Eni, ExxonMobil Awaiting Review of Mozambique LNG Export Project

A development plan covering the first phase of Mozambique Rovema Venture SpA’s liquefied natural gas (LNG) export project has been submitted for government approval, ExxonMobil Corp. said Monday.

The Rovuma LNG joint venture (JV) with Eni SpA would produce, liquefy and market gas from the Mamba fields in the Area 4 block offshore Mozambique. Proposed design and construction call for two trains, with each able produce up to 7.6 million metric tons/year (mmty) of LNG.

ExxonMobil is to lead construction and operate the liquefaction and related facilities on behalf of the JV with Italy’s Eni, which would lead upstream facility construction and operations.

“The Rovuma LNG Project is moving forward swiftly,” said Eni’s Stefano Maione, executive vice president for the Mozambique program. “The size of the project makes it not only an important investment in the country, but also supports economic growth and opens new opportunities for Mozambicans.”

Eni and ExxonMobil last year sanctioned the Coral South floating LNG (FLNG) project in Mozambique’s Area 4. Coral FLNG would have capacity of up to 3.4 mmty.

Area 4 is being developed almost in parallel with Area 1 in Mozambique’s near-shore, which is led by Anadarko Petroleum Corp.  Together, the two projects alone could make Mozambique the fourth largest LNG exporter in the world.

At the recent World Gas Conference in Washington, DC, ExxonMobil’s Jim Muschalik, president of LNG market development, said he has seen “a lot of optimism and excitement about the gas business and specifically, the LNG business, and for good reason. When you look at the demand for gas in the next 25 years, there’s an increase of 25%, and that’s probably somewhat conservative. When you put LNG in that mix, it’s going to be expected to double over that horizon.”

There remains some uncertainty about the LNG supply picture overall, though.

“One thing as we meet with buyers to find out what’s on their minds, it’s certainly stability,” to have supply sources to meet their needs, Muschalik said. With the dearth in final investment decisions (FID) for LNG projects in the last few years, the current period of excess gas supply could dry up quickly, leading “right back into scarcity and facing challenges,” he said.

An FID for Rovuma is expected in 2019. With the green light, LNG production could begin in 2024. As the project progresses, “every effort will be made to actively build the local workforce and supplier capabilities in Mozambique,” the partners said.

Marketing activities are progressing, with negotiations for sales and purchase agreements underway, targeting completion in parallel with the development plan approval process.

The JV is owned by ExxonMobil, Eni and China National Petroleum  Corp., which holds a 70% interest in the Area 4 concession alongside 10% each stakeholders Portugal’s Galp Group, Korea Gas Corp. and Mozambique’s national oil company Empresa Nacional de Hidrocarbonetos EP.

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