Mozambique’s downstream projects need cheaper gas

By Leigh Elston 26 July 2017
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An Anadarko drillship off the coast of Mozambique. (Anadarko) An Anadarko drillship off the coast of Mozambique. (Anadarko)

Mozambique will need to drop the price of the gas it offers to downstream project developers if it wants to move forward with developing a domestic gas industry, two sources working on the projects have told Interfax Natural Gas Daily.

Mozambique’s domestic gas tender offered bidders up to 11.3 million cubic metres per day (MMcm/d) of gas, with the initial 2.8 MMcm/d priced at $2.64/MMBtu. The price for the remaining volumes has yet to be negotiated, but analysts assume it will be higher. 

Following six months of negotiations after the close of the tender in January 2017, the government signed a memorandum of understanding (MOU) with Shell in late June to build a 38,000 barrel per day GTL facility. The plant will produce synthetic diesel, naphtha and kerosene as well as 50-80 MW of power. Maputo also signed an MOU with Yara in early July to build a plant that will produce 1.2-1.3 mtpa of fertiliser and generate 30-50 MW of power.

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