Mozambique Takes Step Closer to Becoming a Global LNG Player

(Bloomberg) -- Mozambique moved closer to becoming a player on the fast-growing global market for liquefied natural gas, eight years after the first major deep-water discovery there.

The development of hydrocarbon resources is crucial for the southern African country, which has struggled this year to service its debt. While the LNG projects will require tens of billions of dollars in funding and take years to develop, they offer a way to stimulate growth in one of the world’s poorest countries.

Exxon Mobil Corp. and Eni SpA said Thursday that they have started marketing gas that would be produced from the planned Rovuma LNG project. The companies expect to make a final decision on whether to proceed with the onshore plant next year. Anadarko Petroleum Corp., which said in April it has secured enough customers for its own project, also plans to make its investment decision in the first half of 2019, Mitch Ingram, executive vice president for international deep water and exploration, said at the World Gas Conference in Washington on Wednesday.

Mozambique expects LNG production to begin from the nation’s first development by the end of 2022. Under the baseline scenario, total state revenues would amount to $49.4 billion over the lifetimes of various projects, the government said in a presentation to creditors with whom it’s trying to restructure its debt.

Exxon last year bought half of Eni’s stake in Area 4, which will supply both the planned onshore Rovuma LNG plant and a $7 billion Coral South floating liquefaction project. Exxon will lead the construction and operation of Rovuma LNG should the partners decide to go ahead with it. Eni will operate Coral South, which it green-lit in 2017.

BP Plc has a 20-year contract to buy all of the Coral South production.

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