Good afternoon. The decision to entrust a new LNG terminal at Inhassoro to a consortium of state-owned companies signals a change in how Mozambique is approaching its gas sector.
The agreement signed last week (but only announced yesterday) between national oil and gas company ENH, national electricity utility EDM, the ports and rail company CFM, and the Cahora Bassa hydroelectric company HCB brings together the country’s most significant public enterprises into a single vehicle with exclusive rights to develop, finance and operate a new segment of the gas value chain.
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From the Zitamar Live Blog:
That level of coordination is new. Mozambique’s state companies have long held stakes in major projects within their respective sectors. What they have not typically done is act in concert as the principal drivers of new ventures. In this case, the state is positioning itself not just as regulator or minority partner, but as organiser and gatekeeper.
Whether the project itself makes economic sense is less clear. Mozambique has long faced a choice between extending pipeline infrastructure from the Rovuma Basin or moving gas south by sea. Over the 2,000km between Palma and Inhassoro, pipelines would normally be the cheaper option. The decision to rely instead on LNG transport and regasification suggests that other constraints are at play, not least the security risks and practical challenges of building infrastructure across Cabo Delgado.
