Mozambique’s government approves Eni’s plan for $7.2bn Coral Norte FLNG project

The government of Mozambique has approved the development plan for Eni’s $7.2bn floating liquefied natural gas (FLNG) project. This will be the country’s second FLNG project led by the Italian major to export the super-chilled fuel.

According to a government statement on April 8, the Coral Norte LNG vessel will have a production capacity of 3.55mn tonnes per year (tpy) over 30 years from Area 4 in Mozambique’s Rovuma Basin. Production of LNG from the block is expected to start in the second quarter of 2028.

“The plan constitutes the second phase of development of the Coral Norte field, FLNG, and consists of a floating natural gas liquefaction infrastructure with a capacity of 3.55mn tonnes per year and six production wells, valued at around $7.2bn, with production scheduled to begin in the second quarter of 2028,” the cabinet spokesman Inocêncio Impissa was quoted as saying by local online media platform Club of Mozambique.

Eni’s first FLNG project, the Coral Sul, in the same area offshore northern Mozambique, has the production capacity of 3.4mn tpy and started exporting LNG in 2022. The Area 4 block is being developed by the Mozambique Rovuma Venture (MRV), a consortium that includes Eni, ExxonMobil (US) and China National Petroleum Corporation (CNPC), which holds a 70% stake in the block split equally among partners.

The remaining 30% is split among Mozambique’s state oil company (ENH), KOGAS (South Korea) and the UAE’s Abu Dhabi National Oil Company (ADNOC), each holding 10%. As recently reported by NewsBase, XRG, a wholly owned subsidiary of ADNOC, on March 27 completed its acquisition of Portuguese oil and gas company Galp Energia’s 10% interest in the Area 4 concession.

This acquisition grants ADNOC access to significant LNG projects within Area 4, including both offshore FLNG projects led by Eni and the planned onshore Rovuma LNG development by ExxonMobil.

Eni said it was making steady progress on its second FLNG project, with Coral Norte receiving more interest than needed for financing. As reported by Reuters on April 9, in the company’s annual report published this month, Eni said it took a final investment decision (FID) for the project in 2024 and was now awaiting approval from its partners.

The project is expected to provide important revenue for the government, with the first LNG shipments due around the time Mozambique’s $900mn Eurobond repayments begin in 2028. According to the media agency, there are growing concerns about the government’s ability to repay its debts, especially after TotalEnergies’ $20bn LNG project was delayed for several years because of attacks by an Islamic State-linked insurgency. These security problems have also delayed the FID for the Rovuma LNG onshore facility planned by ExxonMobil.

According to Standard Bank Group’s data, Mozambique’s economy shrank by 4.9% in the final quarter of 2024, following post-election unrest that forced businesses to close and disrupted trade. However, the ongoing commitment from major international oil and gas players supports the country’s ambitions to become a global LNG exporter, with MRV partners playing a key role in developing Mozambique’s vast offshore gas resources.

A 2024 study by global financial advisor Deloitte found that Mozambique's LNG reserves, with ongoing or planned projects by oil multinationals, could generate potential revenues of $100bn, underscoring the country’s significant role in the global energy transition.

“The country’s vast gas reserves could make Mozambique one of the world’s top 10 producers, responsible for 20% of Africa’s production by 2040,” the report said, as cited by Club of Mozambique.