The Ministry for mineral resources and energy is looking for consultants to advise on the options and costs for developing a downstream gas industry in Mozambique – including on how to price gas for use in projects in the country.
The consultants will need to evaluate and advise the ministry on the volume of gas, the pricing and the necessary infrastructure needed to develop the three projects – a gas-to-liquids (GTL) plant, a fertiliser facility and a power station – selected in Mozambique’s first domestic gas tender.
The consultants will also need to design and recommend mechanisms to use for determining the price of gas allocated to other projects around the country, as well as assessing the current gas transport infrastructure and the need and cost for developing future transport, storage and distribution facilities, according to a tender published in daily newspaper Noticias on 9 May.
MIREME wants the consultants to assess the procedure for allocating domestic gas to projects, including who should own gas and have the responsibility for selling it.
Funding for the work will come from the World Bank’s Mining and Gas Technical Assistance Project (MAGTAP), which aims “to strengthen the capacity and governance systems of key institutions to manage the mining and hydrocarbon sectors in Mozambique.” The contract is expected to cost around $500,000 according to the latest MAGTAP procurement plan.
Mozambique’s petroleum regulator, INP, is currently in discussions with three companies to develop downstream gas projects using the domestic gas allocation from the Area 1 and Area 4 gas fields in the Rovuma Basin in the north of the country.
Anglo-Dutch oil major Shell is negotiating for between 310-330 million cubic feet per day (MMcf/d) of gas from the fields to supply a proposed 38,000 barrels per day GTL plant which will produce synthetic diesel, naptha and kerone, and 50-80 MW of power.
Norwegian fertiliser giant Yara International is negotiating for 80-90 MMcf/d of gas to build a 1.2-1.3 mtpa fertiliser plant and will generate 30 to 50 MW of power.
Finally, Kenyan-owned GL Africa Energy is requesting 41.8 MMcf/d of gas to build a 250 MW power plant.
The ministry will need to bring the consultants on soon. Under the terms of the domestic gas tender, INP and the companies now only have until the end of June to decide which projects to move forward with.
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