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Mozambican Gas Sector: Major Opportunities Across Multiple Industries

Mozambican Gas Sector: Major Opportunities Across Multiple Industries

As of early 2015, Mozambique was estimated to be endowed with more than 􂀀 trillion cubic feet (Tcf) of recoverable natural gas resources, following recent major offshore discoveries made in the Rovuma Basin, close to the border with Tanzania. This is propelling the country into the top 􂀀 countries in Africa for gas reserves with Nigeria and Algeria.

Sasol Limited (Sasol) started producing natural gas in Mozambique in 2004 from its Pande and Temane gas fields, located south of Beira. In 2014, natural gas net production amounted to 􂀀 billion cubic feet (Bcf), of which, 􂀀% was exported to South Africa.

If the significant Rovuma Basin gas resources start being developed, exploration and production (E&P) companies foresee that Mozambique could become the third-largest exporter of liquefied natural gas (LNG) globally within the next decade.

There is also a potential to create a domestic gas market which could benefit many sectors of the economy as well as the residential sector. This will require the implementation of anchor projects to justify the high expenses of building gas transportation infrastructure.

These new resources are expected to be a game changer for Mozambique with the potential to export natural gas, not only to South Africa, but also globally—to Asia and Europe—when the LNG export terminal and/or floating LNG (FLNG) vessels become operational.

However, a few conditions need to be met before this change can happen to benefit the entire population, thereby avoiding the resource curse that some countries, such as Angola and the Democratic Republic of Congo, have fallen into.

About this report

Offshore natural gas discoveries made in Mozambique since 2010 have propelled the country as a new investment destination in sub-Saharan Africa. By exploiting these resources, Mozambique could become the third-largest exporter of liquefied natural gas in the next decade. However, conditions need to be met before this change can happen and benefit the entire Mozambican population, thus avoiding the resource curse that countries such as Angola and the Democratic Republic of Congo fell into. This research seeks to understand the current economic and legislative environment relating to the Mozambican gas industry and to analyse the investment opportunities that are expected to arise along the gas upstream, midstream, and downstream value chain.

  • Executive Summary
    • Key Findings
  • Macroeconomic Context
    • Mozambique GDP Growth Outpacing Rest of the World
    • GDP Composition
    • Extractive Industries to Support Future GDP Growth
  • Legislative Framework
    • Regulatory Structure—Key Stakeholders
    • Revised 2014 Petroleum Law
    • 2014 Special Regime Decree—LNG Project Areas 1 and 4
    • Oil and Gas Legislation
  • Drivers and Restraints
    • Gas Industry Drivers
    • Gas Industry Restraints
    • Additional Comments
  • Upstream Opportunities
    • Large Offshore Gas Finds in the Rovuma Basin
    • Mozambique Significant Gas Resources in Top 15 Globally
    • 180+ Tcf of Recoverable Gas Resources in Areas 1 and 4
    • End User Targets for Mozambican LNG
    • Rovuma Basin Gas Fields
    • Close-Up Offshore Gas Discoveries in Areas 1 and 4
    • Fifth Licensing Round
  • Midstream Opportunities
    • Existing Gas Infrastructure
    • Existing Gas Infrastructure—Transmission and Distribution
    • Existing Gas Infrastructure—Distribution
    • Existing Gas Infrastructure—Pipelines and CPF
    • Future Gas Infrastructure—Onshore LNG
    • Future Gas Infrastructure—Offshore FLNG
    • Future Gas Infrastructure—Transmission Pipelines
    • Future Gas Infrastructure—CPFs and Other Projects
    • Future Gas Infrastructure—Palma LNG Project
    • Mozambique–Tanzania Link—Ally or Enemy?
  • Downstream Opportunities
    • Historical Natural Gas Production
      • Table Natural Gas Net Production, Export and Local Consumption, Mozambique, 2004–2014
    • Gas Master Plan—Gas Monetisation Strategy
    • End-user Analysis
    • End-user Diversification—Maputo
    • Power Sector—Existing Power Plants
    • Downstream Anchor Projects—Future Gas Power Plants
    • Downstream Anchor Projects—Other Future Power Plants
    • Downstream Anchor Projects—Future Power Plants Map
    • Downstream Anchor Projects—LPG, GTL, Fertiliser, Methanol
  • Conclusions
    • Gas Master Plan—Scenario Development
    • Gas Master Plan—Scenario Development Map
    • Direct Associated Infrastructure Opportunities
    • Investment Opportunities Across the Value Chain
  • Appendix
    • List of Acronyms

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