Day: October 29, 2021

ExxonMobil increases support of internally displaced people in Cabo Delgado

As part of the commitment to the development and wellbeing of the communities in which it operates, ExxonMobil Moçambique, Limitada announced the donation of essential food and hygiene products intended to benefit over 1200 internally displaced people in Cabo Delgado. The donation, procured from Pemba based suppliers, will provide packages for family comprised of cooking oil, rice, sardines, tea and includes s hygiene related goods.

This donation builds on the established partnership with VAMOZ, a civil society organization that delivered 15 tons of corn flour to Quitupo in September and further collaborates with the ongoing efforts of the National Institute for Disaster Management (INGD). The $75,000 donation consists of 18 tons of rice, corn flour, beans, sugar and salt and thousands of WASH related items, namely sanitary pads, detergents, water purifiers and soap units.

“We are pleased to work with the Mozambican government and VAMOZ in support of the impacted communities of Cabo Delgado.” said Jos Evens, General Manager of ExxonMobil Moçambique, Limitada. “Food security, personal health and livelihood restoration are primary concerns affecting the IDP community, and we will continue to work collaborative with the local authorities and our implementing partners to assist the affected families.”

“These donations are crucial to the government’s planned humanitarian response to the internally displaced.” Said Elizete Manuel of the National Disaster Management Institute. “We are thankful to ExxonMobil for their continued support in the response here in Cabo Delgado”.

About ExxonMobil

ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. In Mozambique, ExxonMobil holds a 25 percent indirect interest in Area 4 and will lead the construction and operation of future natural gas liquefaction facilities. In addition, ExxonMobil was awarded the joint rights to negotiate the Angoche basin (A5-B) and the Zambezi Delta (Z5-C and Z5-D) concessions, as part of Mozambique’s fifth licensing round

Fuel price hikes: Could be worse, Finance Minister tells Parliament | Mozambique

  • Minister of Economy and Finance says that the price of gasoline could be 75 meticais per litre, instead of 69. The increase was not higher because of the necessity “to do things gradually”, Adriano Maleiane said.

The Minister of Economy and Finance of Mozambique, Adriano Maleiane, said in parliament this Thursday (October 28) that the increase in the price of petroleum products last week was still below what the calculation rules foresee.

The price of gasoline “could be 75 [meticais per litre]” instead of 69, if the law was strictly applied, Adriano Maleiane said.

The increase wasn’t bigger because it was necessary “to do things gradually until we are back on the formula and operating as agreed” between the government and gas stations, Maleiane said.

The calculation rule takes into account the price of a barrel of crude and the exchange rate, providing for updates whenever there are variations of more than 3%.

However, there have been no adjustments for a year because of the damage caused by the pandemic to the economy: “We didn’t think we should increase any more” the cost of living, Maleiane explained. But eventually, “there was no longer any way to hold to this, or else we would run the risk of running out of fuel and everything would be at a standstill”, he said. “So, it was necessary to review prices and even so, care was taken to reflect on it 100% of what the formula says,” he reiterated, without clarifying the direction of future updates.

Transport allowance

On Monday, Minister Tonela justified the price hike with the need to avoid a collapse in the sector, taking into account that some gas stations were having to borrow to withstand the damage caused by the lack of adjustment of retail price.

In Mozambique, all fuel is imported, at an average cost of US$850 million per year, Maleiane explained. Taking into account that the country annually exports US$1.3 billion’s-worth of traditional products (excluding minerals and metals), “66% of [traditional] exports go to buying fuel”.

Should consumers expect more increases?

In response to concerns raised by MPs about the impact on the cost of living, Maleiane replied that the government was subsidising the transport sector, instead of subsidising the petrol stations (as it did until 2015). Support reaches transport users, instead of benefiting all those who fill up their tanks, some of whom might need no support.

On the other hand, the principle is to strengthen the private and family sector of the economy (for example, in agriculture) in order to better prepare themto face external shocks.

Last week, Mozambique’s Energy Regulatory Authority (ARENE) announced a rise in oil product prices in the country between 7% and 22%, reflecting the rise in the price of a barrel of crude.

Matola LNG import terminal on track for 2024 gas supply

  • Final investment decision is expected mid-2022, depending on the level of off-take secured at that stage.

The front-end engineering design (FEED) for the Beluluane Gas Company (BGC) liquified natural gas (LNG) import terminal project – being developed by Southern African energy group Gigajoule, French energy multinational TotalEnergies, and Mozambican natural gas distributor Matola Gas Company (MGC) – has been completed, adding another key milestone to the project. Mozambique’s State-owned gas company, ENH, a shareholder in both MGC and Rompco (the gas pipeline that runs from Mozambique to the industrial heartland of South Africa) has a share in the project.

The project will meet the growing energy demand in both Mozambique and South Africa by utilising MGC’s existing gas pipeline network that will be upgraded to increase its capacity to supply the full capacity of Rompco. Natural gas will be available to industries and power generation projects.

Gigajoule CEO Jurie Swart explains that the Government of Mozambique awarded the LNG import concession to BGC and approved the construction of a new, 28-inch pipeline linking the terminal to the existing MGC transmission network two years ago, after many years of prefeasibility studies. The concession includes the operation of a permanently moored floating storage regasification unit (FSRU), marine infrastructure, and a new high-pressure gas pipeline.

The project is critical for energy security in the region. There is insufficient natural gas to meet the current demand for market growth and the power generation needs in Southern Africa, which is set to worsen as output from the Pande and Temane gas fields start to decline within the next three to five years. This shortage is exacerbated by the urgent need to transition away from coal as a fuel source and to complement the volatility of renewables.

The gas infrastructure will connect the FSRU to a new 2 000 MW gas-fired power plant to be located in Matola, Mozambique, which is well situated on the Southern African grid and able to supply industries with cleaner, dispatchable power at a market competitive tariff.

The project includes an onshore LNG Truck Loading Facility (TLF) capable of supplying customers by road transport who are not situated close to the pipeline distribution network. Preliminary studies indicate that the TLF can compete with alternative fuels for gas transported up to 1 000 km from Matola.

“The TLF will enable industries and independent power producers to obtain natural gas, even in areas not near the natural gas infrastructure. This becomes all the more important since the announcement of the 100 MW Electricity Regulation Act amendment earlier this year,” notes Swart.

The project is located next to the existing MGC infrastructure and is only 90 km away from the Rompco pipeline. “This proximity to the existing gas infrastructure saves building a new supply line to Gauteng, drastically reducing transport costs to gas users,” he says.

“We are already signing up customers for the BGC project, which is now further advanced than what has been previously announced. The project could deliver gas by 2024; however, this is dependent on the commitment by the market,” he emphasizes.

Accompanying Renewables

As proposed in the Integrated Resource Plan 2019, by 2030 the South African grid capacity could comprise 33% solar photovoltaic and wind power plants. However, capacity should not be confused with actual electron flow, and renewable power plants, even when coupled with battery storage, are not completely reliable.

“Although the BGC partners are supporters of an energy transition and decarbonisation – which is non-negotiable – the sun does not always shine and the wind does not always blow. Thus, gas-fired power plants are the most cost-effective alternative to balance the variability of renewables and to maintain a constant, dispatchable power supply to the grid. We cannot throw the baby out with the bathwater and forget the pressing need to create good quality industrial jobs in our region and to get our economies moving,” says Swart.

He adds that natural gas as fuel for power generation is also considered to be much cleaner than coal since natural gas combustion produces zero particulate emissions, zero sulphur dioxide, and 60% less carbon dioxide.

While natural gas is not a completely green power source, it is the cleaner option for supporting the development of renewable energy and transitioning away from coal dependence. What is left of the Pande/Temane fields will not provide for this transition.

“Final investment decision is expected mid-2022, depending on the level of off-take secured at that stage. The FEED has now been completed and approved; final environmental reports compiled; and all development processes, licenses, and approvals are on track, while commercial engagements with the market have already kicked off with first commitments signed,” remarks Swart.

Finally, he stresses that there has been no impact on the project as a result of the unrest in the north of Mozambique, explaining that the BGC terminal will be supplied from TotalEnergies’ global LNG portfolio, meaning that there will be no supply challenges once the LNG terminal is online.

  • Originally published in Creamer Media’s Engineering News & Mining Weekly at www.engineeringnews.co.za”
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