Exxon, Eni Award EPC, FEED Contracts To Revive Mozambique’s LNG Ambitions

Wedoany.com Report-Nov 13,  While liquefied natural gas (LNG) projects in Mozambique seem to have stalled since TotalEnergies declared force majeure in April 2021 on its $20-billion Mozambique LNG development over terrorist threats, indications are that East Africa is back on track toward establishing an LNG hub on the Indian Ocean.

In October, partners in the Mozambique Romuva Venture (MRV)—a competitor to the neighboring TotalEnergies’ project—awarded the engineering, procurement, and construction contract (EPC) to a consortium of JGC, Fluor, and TechnipFMC (JFT) for construction of onshore natural gas liquefaction and related facilities, ExxonMobil reported in a news release.

As lead partners on the Romuva venture, ExxonMobil is responsible for constructing and operating the liquefaction plant while Eni leads on the construction and operation of Area 4 upstream facilities offshore for which a front-end engineering design (FEED) contract was also awarded in October.

McDermott reported that it scooped the FEED award through a consortium with Saipem and China Petroleum Engineering and Construction Corporation for Rovuma LNG Phase 1, thus facilitating movement on the upstream phase while a final investment decision is expected in 2025.

MRV is a joint venture between Eni, ExxonMobil, and CNPC, which holds a 70% interest in the Area 4 exploration and production concession with Eni as operator. Other MRV partners include the Korean Gas Corporation (KOGAS) and Mozambique’s state-owed ENH (Empresa Nacional de Hidrocarbonetos E.P.), each with 10% stakes.

ADNOC Bets Its Future on Mozambique LNG

The Abu Dhabi National Oil Company (ADNOC) holds the final 10% after its purchase in May of the share previously held by Portugal’s Galp.

ADNOC’s farm-in to Mozambique’s Area 4 followed the announcement of its acquisition of an 11.7% stake in NextDecade's Rio Grande LNG export facility in Texas, Reuters reported at the time, adding that ADNOC sees both deals as facilitating its goal of growing its LNG capacity to 15 mpta from its current 6 mpta.

The Rovuma Mozambique LNG project consists of the Eni-discovered Coral, Mamba Complex, and Agulha reservoirs, holding an estimated 2400 Bcm of gas. Eni also holds exploration rights to offshore blocks A5-B, Z5-C, and Z5-D in the Angoche and Zambezi basins, according to its website.

In September, Bloomberg reported that the US EXIM Bank was considering investing in Coral North FLNG but the export credit agency’s website lists the project as having been “withdrawn” in late October, within a week or so of the Romuva partner’s decision to move forward with EPC for the onshore plant.

Bloomberg noted that US EXIM had taken heat for having loaned $4.7 billion to displace funding offered by China and Russia to TotalEnergie’s stalled Mozambique LNG project prior to the force majeure declaration.

TotalEnergies’ CEO Patrick Pouyanne has assured investors repeatedly throughout 2024 of his company’s intent to lift force majeure on Mozambique LNG by yearend, but only after the French company renegotiates terms with contractors over inflation-related price increases.

In a presentation to investors in October, Pouyanne noted that up to “80% of a $14-billion financing package underpinning the (French) project has been confirmed by financiers” and that a meeting with Mozambique’s newly elected president would follow to finalize security guarantees.