NEW YORK, Feb. 1, 2016 /PRNewswire/ --
Mozambique's Potential to Become the Qatar of Africa
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.
- 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.
- One of the conditions entails resolving the political instability which re-emerged in 2013 between Frelimo, the ruling party, and Renamo, the former rebel group and main opposition party.
o Some industry stakeholders are convinced that this should not be an obstacle for the development of the gas industry, and rather think that perceptions about political instability and its related risks must change within the international community.
- Rampant corruption will also have to be curbed in order to avoid increasing wealth inequality and to ensure that the entire population benefits from the large unexploited gas reserves.
- The country's basic transport and energy infrastructure remains largely underdeveloped. Addressing this challenge is paramount to help the country's economy grow and diversify into more value-added sectors.
- A stable and transparent legislative framework is essential to attract investors in the country's gas sector. The Government of Mozambique (GoM) made progress on the matter in 2014 by developing the following policy and legislation:
o Gas Master Plan (GMP), published in June 2014.
o Revised Petroleum Law (No. 21/2014), published in August 2014.
o Special Regime Decree (No. 2/2014), published in December 2014, with specific terms and conditions for the development of an LNG project relating to natural gas discoveries made in Areas 1 and 4 of the Rovuma Basin.
Read the full report: http://www.reportlinker.com/p03002298-summary/view-report.html
ReportLinker is an award-winning market research solution. Reportlinker finds and organizes the latest industry data so you get all the market research you need - instantly, in one place.
Contact Clare: email@example.com
Intl: +1 339-368-6001