Intelligent news from Mozambique

Mozambique energy ministry seeks consultant to develop LNG strategy


Mozambique’s Ministry of Mineral Resources and Energy (MIREME) is recruiting an individual consultant to help the ministry design its gas and LNG strategy, as well as provide support negotiating concessions with oil and gas companies in Mozambique.

The World Bank will provide $300,000 for the one-year consultancy contract, through the Mining and Gas Technical Assistance Project (MAGTAP) which funds various consultancy projects for Mozambique in the field of energy and natural resources.

According to the tender notice, the Senior LNG Consultant will be required to:

  1. Support the minister in the design of short- medium and long term strategic vision for gas, LNG,and domestic gas projects;
  2. Provide guidance regarding LNG markets, pricing and global supply-demand projections
  3. Provide guidance regarding negotiations with concessionaires, including long term strategic approach, deal diagnosis and design to create value, and tactical approaches to claiming value for Mozambique; and
  4. Indicate, coach and undertake short-term training courses as well as on-the-job-training in the topics listed above and other relevant topics, for designated MIREME personnel.

Applications for the position should be in by 30 May, with the preferred bidder informed by 28 June and the contract signed by 23 August, according to MAGTAP’s projected timeframe.

Mozambique’s first LNG project is now underway, with a floating liquefaction vessel being built in East Asia for delivery to offshore Area 4 in 2021, MIREME minister Max Tonela told parliament yesterday. The Anadarko-led consortium operating Area 1 is expected to take a final investment decision on its onshore LNG project early next year, and ExxonMobil is preparing its plan of development for the Area 4 onshore LNG project, to be submitted to government later this year.

Zitamar View: Despite the advanced stage of these projects, there are still plenty of issues for MIREME to work through – including how much gas Area 4  will supply to the domestic market. How much gas the government can negotiate, and at what price will inform the timing and development of projects planning to develop a downstream gas industry in Palma  – in particular, Shell’s planned gas-to-liquids (GTL) project, and Yara’s planned fertilizer plant.

There are also ongoing discussions between LNG producers and the domestic gas projects around shared infrastructure and access to the sea, which the government needs to take a clear stance on.

Given Exxon’s progress on Area 4, there is potentially also an issue of how to sequence the two onshore LNG projects to avoid, as far as possible, competition between the two for access to LNG markets and finance.

Finally, the concession contracts for the exploration areas awarded under INP’s fifth round, which closed two years ago, have still have not been concluded. As negotiations drag on and clarity is still sought on the interpretation of the country’s petroleum law – in particular, on  whether companies producing oil and gas in Mozambique will need to list on the local stock exchange – some winners have given up and walked away from talks.

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