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01.03.2023 International Comparative Legal Guides • Claudia Santos Cruz, Paula Duarte Rocha • Global Legal Group

ICLG to Oil & Gas Regulation 2023 - Mozambique

Claudia Santos Cruz e Paula Duarte Rocha assinam o capítulo de Moçambique do guia “ICLG to Oil & Gas Regulation 2023”, uma publicação do Global Legal Group.

"Mozambique’s significant reserves of natural gas, which are estimated to hold over 100 trillion cubic feet (expected to double following the prospection phase), places the country as one of the largest proved natural gas reserve holders in Africa.

Two onshore fields located in the south of Mozambique (in Pande and Temane) are already well established, operated by Sasol, a South African energy firm that exports natural gas via a pipeline that connects the Pande and Temane fields to South Africa after processing the gas in a central processing facility.
 
In past years, all attention turned to the Rovuma Basin area, close to the border of Tanzania – more specifically Areas 1 and 4, which are both offshore, where multinational oil and gas companies have been investing in prospection and, at the current stage, construction of platforms and drilling for natural gas.
 
The main players in Area 1 of the Rovuma Basin include Total (which acquired the American company Anadarko), Mitsui, Empresa Nacional de Hidrocarbonetos, E.P. (“ENH”, owned by the Mozambican Government), PTTEP, BPRL Ventures, ONGC Videsh and Beas. Meanwhile, Area 4 is being developed by Exxon Mobil, ENI and CNPC (through the joint venture Mozambique Rovuma Venture), as well as Galp, ENH and Kogas.
 
In Area 1, production is expected to start in 2023/2024, with construction of onshore LNG facilities in Afungi, in the Palma district in Cabo Delgado province, whilst in Area 4, floating LNG (Coral Sul Project) arrived in Mozambican waters in January 2022 and began with the first cargo leaving the Coral Sul liquefaction vessel in mid-November.
 
The construction of a gas production plant in Temane (developed by ENH and Sasol) has recently been initiated and its commercial activity is expected to begin in 2024. This project also includes a transmission line connecting Temane to Maputo. Despite these efforts, there is still a pressing need to improve the transportation and distribution of natural gas (including natural gas storage facilities) as it is at a very early stage. New transport pipelines shall be developed, connecting the gas-rich north and south of Mozambique.
 
There are currently no secondary markets for the sale and purchase of natural gas in Mozambique.
 
The development of local content policies has been on the Mozambican Government’s agenda for several years now; however, a consensus is still to be reached."