Mozambique gives state-run ENH 30-year concession to build two FSRUs

The Mozambique government has granted a 30-year concession to four of its state-run companies to build and operate LNG facilities, including two floating storage and regasification units (FSRU), Reuters reported on November 24.

The concession has been approved for management as a special-purpose vehicle for Mozambique’s national oil company ENH, port and railways firm CFM, electricity company EDM, and hydroelectric firm Cahora (HCB) to develop an LNG terminal, storage units, regasification facilities.

The concession also includes the Rompco pipeline, which will stretch 865 km from Mozambique’s gas fields to South Africa. The pipeline is a public-private partnership, with South Africa and Mozambique both possessing a 40% stake, while South African chemicals firm Sasol holds the remaining 20% stake.

The FSRUs will be built anchored off the ports of the central coastal city of Beira and the southern city of Inhambane.

Progress in developing Mozambique’s LNG industry had stumbled in recent years following an attack in March 2021 on TotalEnergies (TTE) project site in Afungi for its 13.1mn tonnes per year (tpy) Mozambique LNG plant. The attack by Islamist insurgents left more than 1,000 killed or missing.

However, projects have been restarted in recent months with force majeure being lifted on Mozambique LNG in October and the $30bn Rovuma LNG project also getting the greenlight to be restarted earlier in November.

With the path now paved for work to resume on Rovuma LNG, the concessions for development of LNG infrastructure in the Rovuma Basin will play a key role in creating the logistical foundation for the projects to be developed and potentially expanded in phases.

Concerns had emerged after the four-year pause on Mozambique LNG that project costs may have now risen to make the project unviable.

But with backing reconfirmed in March by the Export-Import Bank of the United States (EXIM), which revalidated a $4.7bn loan, combined with an improved security situation, development of Mozambique’s LNG sector is speeding ahead.