The eyes of the oil and gas industry are on Mozambique. Initial exploratory drilling in 2007 revealed economy changing volumes of natural gas offshore and since then the promise of vast natural riches has grown steadily to the point that Mozambique could soon be the world’s fourth largest natural gas exporter on the planet.
Mozambique is shaping up to become the world’s next great energy superpower. But what does this development look like? And what does this promise for engineering and technical jobs?
The dawn of a domestic hydrocarbon industry
Today’s excitement and vast prospects stand in stark contrast to the situation just over a decade ago when Mozambique possessed no tangible hydrocarbon resources to speak of. This situation began to change however once Mozambique issued an offshore exploration licence to American-based operator Anadarko in 2007. Dubbed the "Area 1 block", within the Rovuma Basin, the exploratory drilling proved fruitful revealing 480ft of natural gas in February of 2010.
This initial discovery was soon followed by others. The Lagosta Prospect and Windjammer Prospects were the next to follow and were of sufficient quantity to make Anadarko and Italian-energy company Eni pull the trigger on further exploration and development work.
With further drilling it rapidly became clear that the waters of Mozambique - and especially the Rovuma Basin - contained truly vast reserves of high-quality natural gas. How big are these reserves? Estimates vary but a commonly arrived at figure is 100 Tcf (Oil & Gas Journal) of proved natural gas reserves. However, more recent estimates indicate that the Rovuma Basin alone contains a staggering 125 Tcf of natural gas resources.
It's clear that Mozambique is positively saturated in natural gas. It’s now over to energy operators such as Shell, Anadarko (Total), Eni and others to put the infrastructure in place to exploit these reserves and put Mozambique firmly on the world stage as an energy superpower.
So, what infrastructure and activity is currently planned and underway in Mozambique? We’ve detailed the major developments to watch across Upstream, Midstream and Downstream below.
Mozambique Upstream Developments
Offshore Area 1 Block, Rovuma - Windjammer, Ironclad, Barquentine, Lagosta, Tubarao (Prosperidade Complex)
The prospects which began it all for Mozambique’s nascent hydrocarbon industry, Offshore Area 1 covers around 2.6 million acres in the deepwater Rovuma Basin. Collectively known as the Prosperidade Complex, the block is estimated to hold recoverable resources in the region of 17 to 30 trillion cubic feet (Tcf) of natural gas.
Original plans for the exploitation and development of the Prosperidade Complex included 30 to 35 subsea production wells fed to an initial two-train liquefaction plant in Afungi. However, given the scale of resources, the number of subsea wells may rise to 60. Total, which is the primary operator of the complex, is also planning the installation of three gas export pipelines (22-inches), one service line (of 8 inches) and two mono-ethylene glycol lines. In addition, the development is likely to include 120 kilometres of umbilicals and 35 to 40 kilometres of infield flowlines.
Once production from the Prosperidade Complex begins, Total has said that 2 billion cubic feet of natural gas per day will be produced and sent up to the LNG plant in Afungi.
Offshore Area 1 Block, Rovuma - Golfinho-Atum Development
Whilst the Golfinho-Atum discoveries also sit within the same block as the Prosperidade Complex, they are being developed separately.
The Golfinho-Atum Complex holds around 31.9 Tcf of natural gas resources which will eventually feed the LNG plant in Afungi. The Complex is being developed by a Total-led consortium which includes Mitsui E&P Mozambique Area 1 Ltd (20%), ENH (15%), BPRL Ventures Mozambique (10%), ONGC Videsh Ltd (10%), Oil India Ltd (10%) and PTTEP Algeria (8.5%).
Contractors engaged in the development of the complex include TechnipFMC, Van Oord, Oceaneering, Allseas, Cameron and others.
Development of the Golfinho-Atum Complex is planned to consist of 20 subsea wells with horizontal trees distributed among 10 manifolds. Gas will then be fed via a series of 16-inch diameter export pipelines to the Afungi LNG plant. In addition, there has been some speculation that up to three export pipelines which could handle up to 1 Bcf/d of gas could be constructed.
Once fully developed, the Complex is expected to produce 2 Bcf/d.
Offshore Area 4 Coral Field Upstream Development
Another huge source of natural gas reserves, Mozambique’s Area 4 block covers an area of 17,646 sq km offshore, reaching depths of 2,600 metres.
Being developed by Mozambique Rovuma Venture (which consists of ExxonMobil, Eni, China National Petroleum Corporation) the Coral-1 discovery is estimated to contain between 7 and 10 Tcf of natural gas. The subsequent Coral-2 well within the Area 4 block encountered 140 metres of gas in play. In total, the two wells which make up the Coral field are estimated to hold gas reserves of 15 Tcf.
Also within the Area 4 block sits the Agulha discovery. Preliminary estimates suggest that this discovery may hold 5 to 7 Tcf of gas.
The development plan for the Coral field calls for the use of a FLNG vessel to exploit the gas reserves at the block. In addition to the FLNG vessel, the Coral field will involve the installation of a subsea system that includes six subsea wells. This subsea production hardware will then be linked to the Coral FLNG via an umbilical, riser and flowline system.
Amongst the contractors which have been selected for the development of the Area 4 Coral Field project are Baker Hughes, TechnipFMC, Saipem and Aker Solutions.
Should the project proceed as planned, start-up will begin in 2022. At the time of writing drilling and completion activities for the six subsea wells is underway.
Offshore Area 4 Mamba Complex
Also sat within the Area 4 block is the Mamba Complex which consists of three overlapping fields - Mamba North, Mamba Northeast and Mamba South. In conjunction with the Coral field development, the Area 4 block is estimated to contain 85 Tcf of gas. Unlike the Area 1 Block however, the gas within Area 4 is dry so limited flow assurance and minimal liquids are expected from the development.
The Mamba Complex is being developed by the Mozambique Rovuma Venture (70%), in conjunction with Galp Energia (10%), KOGAS (10%) and ENH (10%).
The initial exploration stage of the Mamba development project will involve 21 subsea wells in 1,800 metres of water feeding gas 60 kilometres to LNG trains via four flowlines. These wells are expected to produce 100 MMcf/day with start-up aimed for 2024.
The developers of the Mamba Complex are aiming for the start-up of production in 2024.
Temane and Inhassoro PSA Expansion (Phase 1)
South Africa’s SASOL is presently working on the expansion of gas processing facilities at the Temane gas field and the greenfield development of the Inhassoro oil discovery.
At present the bulk of gas currently produced from the Temane field is exported to South Africa via an 865-km pipeline, with the remainder being used to fulfill domestic demand requirements. The proposed expansion for the field will involve the drilling five extra wells along with the construction of a fifth train at the Central Processing Facility (CPF), with a capacity of 150 MMcf/d of gas. At present it appears that contractors engaged on the project include Genesis Oil & Gas Consultants, ThyssenKrupp Industrial Solutions, Wood, and SMP Drilling. The Inhassoro discovery represents the first commercial oil find within Mozambique and is expected to produce up to 2,000b/d upon start up. It is understood that SASOL is currently reconsidering the original development concept that was put forward for the Inhassoro field.
Juan de Nova Maritime Profond Block Exploration
Whilst information on this relatively new exploration block is scarce, we’ve included it in this article as it indicates that exploration activity is far from over offshore Mozambique. Led by South Atlantic Petroleum (SAPETRO) in conjunction with Marex Petroleum Corporation, exploration of the Juan de Nova Maritime Profond Block, which covers an area of 52,990 sq km, is currently underway with implementation and interpretation of 3D seismic surveys believed to be ongoing.
Mozambique Midstream Developments
Rovuma LNG Liquefaction Plant
The Rovuma LNG Liquefaction Plant represents one of the biggest ever construction projects ever to be carried out in Mozambique. It’s this project, in conjunction with Total’s Mozambique LNG Project, that will be responsible for transforming Mozambique from a hydrocarbon minor player into a global energy giant.
Situated on the Afungi Peninsula the Rovuma LNG Liquefaction Plant will draw upon the massive natural gas resources of the Mamba Complex in the Area 4 block of the Rovuma Basin, and the Coral South project. Spread across some 7,000ha the Rovuma LNG Plant will in the first phase consist of two liquefaction trains of 7.6 Mtpa each. The marine facilities for the plant will include a multi-purpose dock (MPD) to support the primary construction activities, and an LNG export jetty with two marine loading berths to accommodate LNG carriers. To facilitate speedy logistics and onboarding of contractors and staff a 3.5 km-long permanent airstrip is undergoing construction.
The project now appears to be proceeding at a fair pace, with the Rovuma Venture consortium recently awarding an EPC contract to a JGC Corp-led group which includes Fluor Corp. and TechnipFMC.
Designed to have an operational lifespan of 30 years, the Rovuma LNG Plant is expected to receive a final investment decision in early 2020. Production is expected to begin in 2024/25 at which point the Plant will produce approximately 15-16 million tons of LNG per year.
Mozambique LNG Project
The second of Mozambique’s massive onshore LNG developments, the Mozambique LNG Project is being pushed forward by a consortium of companies including Total, Mitsui & Co, ONGC, ENH, Bharat PetroResources, PTTEP and Oil India Ltd.
A final investment decision was reached for the Mozambique LNG Project in June 2019, and since then the project has changed hands with Total acquiring Anadarko’s 26.5% interest in the project in September 2019 for a purchase price of $3.9 billion.
The onshore LNG facility is being developed in stages with initial plans calling for the development of two trains, each with a capacity of 6.44 mtpa (equalling a total nameplate capacity of 12.88 mtpa). Two LNG storage tanks, each with a capacity of 180,000 cubic metres, condensate storage, a multi-berth marine jetty and associated facilities and infrastructure will also be constructed. Subsequent phases are being considered which would see the addition of extra trains to increase the volume of LNG that could be exported from the facility. The Plant will derive its natural gas feedstock predominantly from the fields of the Area 1 block such as Golfinho-Atum Complex and the Prosperidade Complex. It is expected that the Mamba Complex and Coral FLNG will also supply natural gas to the Plant.
Contractors which have been confirmed to develop the Mozambique LNG Project so far include KBR, TechnipFMC, Chicago Bridge & Iron (CB&I), Chiyoda Corp, Bechtel, Fluor Corporation, JGC, and the CCS JV.
With upwards of 15,000 workers required for the Mozambique LNG Project during its construction, operation and maintenance phases it’s clear that this project will be a major boom for the local workforce.
Coral FLNG
The Coral FLNG project will see the construction of a floating liquefied natural gas vessel to service the Coral Gas field within the Area 4 block. Although details remain scant at this stage, the design of the FLNG will consist of a turret moored double-hull ship which will have gas receiving, processing, liquefaction and offloading facilities on board, along with LNG and condensate storage. Overall, the vessel will have a capacity of around 3.4 mtpa.
The development of the Coral FLNG project is being led by Italian energy company Eni and will be classed as an ‘ultra deepwater FLNG’ due its expected water operating depth of 2,000m.
Construction of the vessel officially began in September 2018 and once operational the FLNG will have an operational lifespan of 25 years. Vessel construction is currently being undertaken at Samsung Heavy Industries’ (SHI) Geoje Shipyard in South Korea.
In terms of specifications, the Coral FLNG is being fitted with four turbo-compression trains equipped with aero derivative gas turbines and four turbo generation units also driven by aero derivative gas turbines, for gas refrigeration and power generation.
Contractors which have been appointed to work on the project so far include DSME, KBR, Turner and Townsend, Reef Consortium, GTT, Baker Hughes, Sofec Inc, Air Products & Chemicals, Amarinth and others.
On completion the Coral FLNG vessel will have a total LNG storage capacity of more than 230,000m3 and gas condensate storage capacity of 50,000m3. Upwards of 350 people are expected to be working on the vessel at anyone time.
Mozambique (Cabo Delgado) to South Africa (Richard’s Bay) Gas Pipeline
Mozambique’s sudden energy abundance has come at an opportune time for its southern neighbour South Africa. With relatively few natural energy resources of its own (apart from coal) and an increasingly energy intensive economy South Africa has been on the lookout for nearby, abundant affordable energy supplies. The Mozambique (Cabo Delgado) to South Africa (Richard’s Bay) Gas Pipeline offers an answer to this situation.
Stretching 2,450 kilometres, the pipeline will supply natural gas from the Rovuma basin directly to South Africa where it will be used for gas-to-power markets.
To-date progress on the pipeline project has been slow and it remains in the feasibility stage. Much of the slow progress has been attributed to political wranglings and other behind the scenes negotiations with Eskom - South Africa’s major domestic energy utility. It is understood that March 2019 saw South Africa’s Energy Minister visit Mozambique to discuss the next stages of pipeline construction.
Nacala LNG to Powership
Mitsui OSK Lines and Karpower International are teaming up to build Mozambique’s first LNG-to-Powership project.
The project will involve the construction and operation of an FSRU (Floating Storage Regasification Unit) which will deliver regasified LNG to a Powership which will then use this LNG to produce electricity for Mozambique’s domestic electricity network. The Powership will connect to the national grid through a transmission and distribution facility operated by the Electricidade de Mocambique (EDM), the Mozambican National Power Utility. The Powership is currently in operation but is reliant upon heavy fuel oil. However, once the FSRU has been delivered it will be switched to LNG - making it a much cleaner, lower-carbon source of energy. Whilst the project is still in the planning stages it is envisaged that it will progress rapidly starting-up in 2021 which will make it the first LNG-to-power solution and FSRU project in Eastern and Southern Africa.
Mozambique Downstream Developments
Mozambique New Refinery
At present Mozambique is heavily reliant on oil and gas imports. The reason? A dearth of domestic refining capacity. The Mozambique New Refinery project aims to alleviate this issue by constructing Mozambique’s first refinery. Fed by crude supplies from the Rovuma Basin, Mozambique Basin, and a small amount of imported feedstock from the international market the refinery project should help to meet growing domestic demand for a wide slate of refined products.
Details about the project remain few and far between however and the last concrete update we were able to obtain suggested that the operator behind the project - Empresa Nacional de Hidrocarbonetos (ENH) is currently undertaking a feasibility study to determine an appropriate location, design, timeframe and capex spend for the refinery.
Afungi GTL
When it comes to liquid fuels in Mozambique all eyes are understandably on the Mozambique LNG and Rovuma LNG Projects, however there’s a third similar project on the horizon. Albeit smaller in scale, and producing Gas to Liquids (GTL) rather than LNG, the Afungi GTL project is another downstream project which will add to Mozambique’s ability to export energy onto the world stage.
The brainchild of Anglo-Dutch energy giant Shell, the Afungi GTL project will draw upon natural gas from the Rovuma Basin to produce 38,000 b/d of liquid fuels including GTL diesel, naptha and kerosene, as well as 50MW to 80MW of electricity.
At present the Afungi GTL project is in feasibility stage whilst Shell works towards a final investment decision at some point in 2021. Should a successful FID be reached construction of the facility is anticipated to take four years with startup as soon as possible thereafter.
Mozambique is a country of opportunity for oil and gas professionals
Mozambique’s burgeoning hydrocarbon economy is creating a wealth of employment and contract opportunities for expatriates and local workers alike. As the list above indicates, there are a wide range of opportunities across the Oil & Gas lifecycle too. From upstream offshore production projects all the way through to downstream refining projects there will be thousands of jobs available over the coming decade.
Like many other countries which have suddenly found rich and abundant natural resources within their borders, Mozambique is taking proactive efforts to ensure that local people and businesses benefit. A robust set of local content policies have already been implemented. Known as the ‘National Content Strategy’ the policy focuses on three pillars:
Operators are encouraged to employ Mozambican citizens with appropriate qualifications at all levels of their organisation (or as sub-contractors).
The development and implementation of effective training programmes for Mozambican employees in each phase and level of operations of projects.
Operators are encouraged to engage in the preferential purchasing of local goods and services when internationally comparable in terms of quality, availability, quality and price.
With such policies in place it is hoped that Mozambique’s local workers and businesses will be able to derive a short and long term benefit from the country’s hydrocarbon windfall.
Naturally, there are expected to be thousands of opportunities for experienced expatriates on these Mozambican projects. Already, Fircroft has made high-level placements on projects such as Rovuma LNG and Mozambique LNG - and as the list of projects above makes clear - there are many many more contracting opportunities on the horizon.
So this all brings us back to our opening question… Is Mozambique the world’s next great energy superpower? It’s too early to say, but if the projects we’ve looked at come to fruition and local workers and expatriates alike can achieve the full potential of Mozambique’s amazing hydrocarbon resource base the answer is likely to become yes.
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