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Mozambique’s Rise in the Global LNG Market

Industry, Insights

30 November 2023

Eusoria Marta

Mozambique, a country in southeastern Africa, has been making waves in the global oil and gas industry in recent years. With substantial offshore reserves of Liquified Natural Gas (LNG), it has become an attractive destination for international energy companies seeking new exploration and production opportunities.

This journey towards becoming a significant player in the global energy market has not been one without its challenges.

Mozambique boasts extensive offshore natural gas reserves in the Rovuma Basin, particularly the Area 1 and Area 4 blocks. These fields are estimated to contain more than 100 trillion cubic feet of natural gas, making Mozambique one of the world’s largest untapped gas resources in the world.

This significant discovery has fueled optimism about the country’s potential to become a major exporter of LNG.

The LNG export projects have attracted significant attention from international oil and gas companies, actors like TotalEnergies, ExxonMobil, and Eni, who have invested heavily in developing these resources.
The Coral South Floating LNG project, operated by Eni, is one of the first ventures to produce LNG in Mozambique and has the potential to transform the country’s economy.

Mozambique’s foray into LNG exploration and production offers a multitude of benefits that extend beyond the energy sector. As this emerging industry gains momentum, it brings a host of advantages to the country, its people, and the global energy market.

The construction of two LNG projects, Mozambique LNG (led by TotalEnergies) and Rovuma LNG (led by ExxonMobil), are well underway. Once completed, they are expected to boost Mozambique’s position as a global LNG exporter significantly.

LNG exploration will contribute to Mozambique’s economic growth and revenue generation by creating jobs and stimulating economic development, helping to alleviate poverty, and driving prosperity within the country. The energy sector contributes significantly to government revenue through taxes, royalties, and production-sharing agreements. This will allow for more investments in public services and infrastructure.

Prosperity to the Country

As these projects commence, Mozambique will be able to develop domestic energy resources, such as natural gas, enhance energy security, and reduce reliance on imported fuels. The country will also be able to diversify its energy mix, moving away from traditional fossil fuels towards cleaner and more sustainable energy sources.

International energy companies bring capital, expertise, and technology to Mozambique, promoting economic growth and technological advancement. Collaborating with these companies will allow Mozambican workers to gain valuable skills and knowledge, fostering human capital development.

The construction of LNG facilities necessitates the development of supporting infrastructure, such as ports, roads, and utilities, benefiting both the energy sector and the broader economy. Improved infrastructure will also enhance transportation and connectivity, facilitating trade and investment in other sectors.

LNG projects often include provisions for local content, promoting the use of local goods and services, which benefits local businesses and communities. Vast social-economic improvements have been observed in the areas in which the LNG projects operate, evidenced by the ongoing TotalEnergies-led Pamoja Tunaweza initiative.

Increased government revenue can be reinvested in healthcare, education, and other essential services, ultimately raising the standard of living for citizens.

Mozambique’s LNG exploration not only holds the promise of transforming the country’s energy landscape but also has the impact of driving economic growth, fostering technology transfer, and improving the overall well-being of its people. It places Mozambique firmly on the global energy map, positioning the nation as an emerging LNG powerhouse with immense potential for a brighter and more prosperous future.

To learn more about Global Edge Mozambique and its role in the rise of the LNG Market in Mozmabique, visit our Mozambique office page.

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