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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”

Mozambique: Government committed to produce zero carbon natural gas

Mozambique’s Minister of Mineral Resources and Energy, Max Tonela, this Friday reiterated the country’s commitment to exporting carbon-free natural gas, using technologies which curb pollutant emissions by oil companies.

“The government has decided to embark on a gas decarbonisation process. Although we have a gas that already has a small emission content, we are prioritising the use of pre-existing decarbonisation technologies,” Minister Tonela said.

Speaking to journalists about the future of fossil energy in the face of growing global concern about climate change, the minister noted that the oil industry had developed technologies to remove carbon from gas and return the pollutant to its source, with a view to exporting a clean product.

Max Tonela said that Mozambican natural gas has little “polluting content”, and will be decisive in deactivating coal-fired power stations in southern Africa and elsewhere, in the context of reducing carbon dioxide emissions.

“We are going to see an increase in gas consumption, as it is the least polluting among fossil fuels, and we are also going to see an accelerated increase in renewable energies, which are still an intermittent energy source,” Minister Tonela said.

Mozambique, with its huge gas deposits, wants to be an active player in decarbonisation, using the resource for the economic development of the country, of southern Africa and other countries, he added.

Source: Club of mozambique

Mozambique: Enserve renews maintenance contract with Sasol

Mozambican company Enserve this week announced the renewal of its existing valve maintenance contract with Sasol at the Temane Power Plant project in Mozambique.

According to a note from the company, under the new agreement in force from 30 June 2021, Enserve Moçambique will continue to provide maintenance and refurbishment services for control and shut-off valves at the Temane processing facility.

“We are pleased to further expand our already close partnership with Sasol Temane,” Enserve Mozambique country manager Paulo Chibanga said. “Based on our excellent and trusted relationship, I believe that extending this successful cooperation will allow us to improve and continue to deliver world-class technical expertise and services to the further benefit of Sasol’s production, competence and capabilities.”

According to the same note, the renewed contract will also allow Enserve to access a growth platform by providing stability, which gains particular relevance at a time when the oil and gas industry was experiencing uncertainty as a result of the Covid 19 pandemic.

Source: Club of mozambique

TotalEnergies Mozambique LNG project may resume within 18 months: AfDB

TotalEnergies’ liquefied natural gas (LNG) project in Mozambique could be back on track within the next 18 months after African armies deployed to help quell an insurgency, the president of the African Development Bank (AfDB) said on Friday.

The French energy giant declared force majeure on the $20 billion project in April after Islamic State-linked fighters overran the town of Palma, on the doorstep of its facilities in the northern Cabo Delgado province. It estimated at the time the disruption would delay development by at least a year.

Troops from Rwanda and members states from the Southern African Development Community (SADC) have since deployed to support Mozambican forces to help put down the insurgency.

AfDB president Akinwumi Adesina told Reuters he did not expect the interruption to affect the LNG project’s long-term viability.

“The return of security in that place will give assurances to Total and others to return,” he said. “In one year to 18 months, I expect it to be stabilised enough to get back on track.”

TotalEnergies declined to comment on Adesina’s remarks.

The AfDB is lending $400 million to the project, which is Africa‘s largest ever foreign direct investment and a lynchpin of Mozambique’s economic development strategy.

“It gave us real concern when Total declared force majeure and they had to move out. But you can understand because of the insecurity situation,” Adesina said.

Southern African nations agreed in June to send troops to assist Mozambique, and Rwanda, which is not a SADC member, deployed 1,000 soldiers a month later.

Mozambican President Filipe Nyusi has said the army is now retaking ground in Cabo Delgado. Last month, Mozambican and Rwandan security forces recaptured the port town of Mocimboa da Praia, previously an insurgent stronghold.

But Adesina said insecurity was still restricting investment in other parts of Africa, pointing to conflict zones in Chad, Mali, Burkina Faso, northern Nigeria and Cameroon.

He said the AfDB was developing facilities, including security-indexed investment bonds, to help African countries tackle insecurity and rebuild after unrest.

“Without security, you can’t have investment and you can’t have development,” he said.

Source: Club of mozambique

Mozambique: LNG terminal will be built in Matola

The Matola Gas Company (MGC), in partnership with the French oil and gas company Total, has guaranteed the construction of a Liquefied Natural Gas (LNG) Terminal in the southern Mozambican port of Matola, in anticipation of declining gas production from the Pande and Temane onshore gas fields in Inhambane province.

The South African petrochemical company Sasol operates the Pande and Temane fields. The gas is processed at Temane, and an 865 kilometre pipeline carries it to Secunda in South Africa. A spur carries some of the gas for use by industries in and around Maputo.

The construction of an LNG terminal is intended to ensure the uninterrupted supply of gas to more than 30 industries in the Maputo/Matola area, and in future for export to other SADC (Southern African Development Community) countries.

Initially, the terminal will receive LNG from the international market, but later the LNG will come from Mozambique’s own reserves in the Rovuma Basin, in the far north of the country. Total is the operator of Rovuma Basin Area One, and heads the consortium that will produce LNG at plants built on the Afungi peninsula, in Palma district.

ALSO READ: Gigajoule and Total sign Joint Development Agreement for the importation of LNG and power generation

The Rovuma Basin LNG will replace the gas from Pande and Temane, which will go into decline as from 2024, as the reserves are gradually exhausted.

Interviewed by AIM, the MGC Chief Executive Officer, Bruno Morgado, said “the Pande and Temane gas will come to an end, and it must be replaced by finding other sources. That’s why we are going to push ahead with building an LNG terminal. We have to find a solution so that we can continue supplying gas to industries and to power stations in the southern region of the country”.

Construction of the terminal is expected to begin in the first quarter of 2021, with an investment of 300 million US dollars. The initiative also seeks to anticipate strategically the regional market, by creating LNG infrastructures, in order to capitalise on business opportunities.

ALSO READ: 2000 MW gas-fired power plant planned for Beluluane Industrial Park

Morgado believes that building an LNG terminal in southern Mozambique is crucial and urgent in order to attract businesses of the region – otherwise other countries will step in with initiatives of the same sort, and Mozambique will become a victim rather than a protagonist “which could be disastrous for the economy, and for ensuring the viability of businesses in energy and in other sectors”.

“If we don’t build an LNG import terminal, South Africa may advance before we do”, said Morgado. That could squeeze Mozambique out.

Morgado believed that, with the construction of an LNG terminal in Matola, Mozambique will be able to use the Rovuma Basin gas for the benefit of its own economy. He believed this would open the path for the construction of terminals elsewhere in the country, and eventually to the building of a north-south gas pipeline, as a viable solution to the distribution of Rovuma Basin gas inside the country and to other SADC members.

“Only if we make these projects viable, will we monetise the gas”, he added. “Instead of all the gas being taken to the western and Asian markets, it can be used in the country, adding value to a national resource. With these facilities, we will be able to export to South Africa and to the SADC region”.

ALSO READ:  Mozambique: Government greenlights two major power projects

Morgado argued that this will make Mozambique an energy hub, and cement its strategic position in the region.

He believed that the national energy panorama is promising, and can create attractive economic cycles. But to draw the greatest advantage from the sector, a large scale market for the gas must be created within Mozambique, with sufficient consumption to justify a north-south pipeline.

Source: Club of mozambique

Key energy deals in Mozambique move forward with major support from U.S. International Development Finance Corporation

On September 9, the Board of Directors of the U.S. International Development Finance Corporation (DFC) approved a loan of up to $200 million to Central Térmica de Temane and agreed to provide up to $1.5 billion in political risk insurance to support the commercialisation of natural gas reserves in Area 4 of Mozambique’s Rovuma Basin.

Together, the two deals represent a substantial investment by the United States that will improve access to energy, lay the foundation for transformational growth in Mozambique fuelled by the natural gas sector, and deliver on the U.S. Prosper Africa pledge announced last year in Maputo to increase U.S. investment in Africa.

DFC’s loan of up to $200 million to Central Térmica de Temane (CTT) will finance the development, construction, and operation of a 420-megawatt power plant and 25-kilometre interconnection line, which will diversify the country’s energy supply and reduce the cost of electricity. As around 33% of Mozambique’s population has access to electricity, this project will help Mozambique advance toward its goal of achieving universal access to energy by 2030.

 

DFC’s provision of $1.5 billion in political risk insurance will support the development, construction, and operation of an onshore natural gas liquefaction plant, along with supporting facilities. This energy project will provide a significant boost to Mozambique’s GDP as the country emerges as a top global gas exporter. Combined with forward-looking partnerships between the government and the private sector – the project has the potential to grow the economy to meet the needs of the Mozambican people.

U.S. Ambassador Dennis Hearne welcomed the news. “These projects will have a significant development impact in Mozambique, improve lives, and create a once-in-a-generation opportunity for the country to build a more prosperous future for all Mozambicans,” he said.

These projects and funding build on a foundation of more than $500 million in annual assistance the U.S. Government provides to improve the quality of education and healthcare, promote economic prosperity, and support the overall development of Mozambique.

DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. It was established by the 2019 passage of the BUILD Act (Better Utilisation of Investments Leading to Development), which strengthened and modernised American development finance. The BUILD Act combined the capabilities of the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority, which had previously been part of the U.S. Agency for International Development (USAID).

Source: Club of Mozambique

Sasol’s asset sale program advances with bids due for pipeline running from Mozambique to South Africa

  •  Fuel and chemical company has accelerated asset sales for debt
  •  Rompco gas pipeline runs to Sasol’s South African operations

Sasol Ltd. expects binding bids within weeks for its stake in a natural gas pipeline running from Mozambique to South Africa, as the company accelerates asset sales to pay off debt, according to people familiar with the process.

The bidding round underway for the Rompco 865-kilometer (537-mile) gas pipeline stake concludes in late July, according to two of the people who asked not to be identified because the information isn’t public. Sasol holds a 50% share, with two remaining 25% stakes owned by the South African and Mozambican governments.

The fuel and chemicals producer is trying to raise as much as $5 billion through asset sales amid cost overruns and lower oil prices. The company has moved quickly, with processes to sell stakes in its U.S. Lake Charles Chemicals Project and as recently as May was considering putting the Rompco share on the block, people familiar with the information said at the time.

Nedbank Group Ltd. is running the pipeline stake sale, according to one of the people. The bank declined to comment.

Sasol declined to comment specifically on the pipeline. The company is taking steps to reposition the business over the following 24 months, it said in a statement. “One of these measures will be our existing asset disposal program.”

The natural gas that Sasol processes from the Pande and Temane onshore fields in Mozambique and transports through the line will remain a part of the company’s efforts to lower its carbon footprint, Chief Financial Officer Paul Victor said last week in an interview.

The South African government, which owns 25% through its iGas unit, has expressed interest in a bigger stake in the line. Mineral Resources and Energy Minister Gwede Mantashe in a June 23 discussion said the country should focus on accessing Mozambique gas. “We are hoping to increase our shareholding in that.”

The department didn’t immediately respond to emailed questions over its interest in the pipeline.

By Paul Burkhardt and Loni Prinsloo

 — With assistance by Grace Huang

Source: Bloomberg

Mozambique: Instability aggravates risks to natural gas projects

The military instability in Cabo Delgado, northern Mozambique, is aggravating the risks associated with the investments in natural gas production in the region, Mozambique’s central bank said on Wednesday.

The situation has several economic effects for the country, including the aggravation of risks and uncertainties associated with the development of natural gas projects, the central bank said in a document with answers to questions posed by journalists.

“The increase in project security costs or the postponement of investment decisions have a high socio-economic cost for the country,” it said.

On the one hand, these security costs are recoverable, i.e. they are later deducted from the tax that must revert to the state at the production stage.

On the other hand, the delay in investing affects the viability and sense of opportunity of the projects, in a scenario where discoveries are made in other regions of the world, which may compromise the economic gains of the country – revenues, dividends, employment and others.

Of the three development plans, one, led by ExxonMobil and ENI, announced this month the postponement of the final investment decision, but due to the impact of Covid-19.

The other effects of insecurity in Cabo Delgado are the deterioration of the business environment and the restriction of the functioning of public services and the movement of people and goods in the region.

The central bank highlighted the destruction of infrastructure, generating displacement and increasing costs in the areas of defence, security and humanitarian assistance, which forces the state to give up some development projects to meet the expenses associated with the conflict.

The northern province of Mozambique is being plagued by attacks by armed groups classified as a terrorist threat, which have killed at least 500 people in the last two and a half years.

The Mozambican authorities say that 162,000 people have been affected by armed violence in that province.

At the end of March, the towns of Mocímboa da Praia and Quissanga were invaded by a group, which destroyed several infrastructures and raised its flag in a barracks of the Defence and Security Forces of Mozambique.

On the occasion, in a video distributed on the Internet, an alleged jihadist militant justified the attacks by armed groups in northern Mozambique to impose Islamic law in the region.

This was the first message issued by the perpetrators of the attacks that have taken place for two and a half years in Cabo Delgado province, recorded in one of the villages they invaded.

Source: Lusa

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