Good afternoon. What is the Mozambican government going to do with all its future gas? According to President Daniel Chapo, by law the state is entitled to 25% of the gas produced from forthcoming liquefied natural gas (LNG) production projects as domestic gas, the property of the state to use or sell. He was speaking during a meeting with executives from oil and gas firm ExxonMobil in Houston, Texas, to talk about the company’s plans for its $30bn project in Cabo Delgado province, known as Rovuma LNG. Now that TotalEnergies has announced the formal unfreezing of its own LNG project, ExxonMobil is expected to push forward with its own plans.
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Whether the state actually gets 25% of the gas produced from those two projects (a sizeable amount, nearly 8m tonnes a year, more than production from Eni’s Coral South and Coral North offshore gas projects combined) remains to be seen, but even if it does, the government has yet to show how the gas would provide widespread benefits for Mozambicans.
We have been here before. In the past the government has tried to advance projects to use Mozambican gas locally, including from the offshore Rovuma basin, the gas fields to be exploited by TotalEnergies and ExxonMobil. Those projects, such as a fertiliser plant to be built by Norwegian fertiliser producer Yara, or a gas-to-liquids plant to be built by Shell, largely came to nothing, apparently proving to be commercially unviable for one reason or another. A joint venture between state-owned oil and gas firm ENH and Kogas of South Korea to build a gas distribution network in and around the city of Maputo has been disappointing; only about 500 households have been added to the network in Maputo in the past six years, and that project may well be stalled now that Kogas has withdrawn from it.
