A 10-year build-up of supermajor, offshore-heavyweight and expert onshore hydrocarbon players in Tanzania and Mozambique’s Rovuma Basin is starting to produce a trickle of large supplier orders that’s expected to become a torrent, as liquefied natural gas (LNG) trains line up.
The stakes of claim onshore and offshore have been many, since the Basin began revealing its prolific gas troves to Calgary-based upstream player Artumis — now London-based Wentworth Resources. But on Monday, Mitsubishi Heavy Industries (MHI) became the first big contractor to secure significant work, agreeing to supply H-100 gas turbines sand compressor packages for the Rovuma LNG Phase 1 project in Mozambique.
The award marks a major milestone for both Rovuma LNG and those hoping to benefit from future gas infrastructure in the remote region. And infrastructure in on the way, as Tanzania alone has six identified fields showing somewhere between 3 trillion and 6 trillion cubic feet of 3P gas reserves.
Since the days as Artumis, Wentworth has doubled its gas production in Tanzania, and management point to the developing LNG order across the two-country Rovuma area. Wentworth feeds gas into the local grid from land plant on Mnazi Bay, but management has made shareholders aware of the coming gas pipelines to complement the coastal one to the capital.
The MHI agreement with ExxonMobil (onshore) and its co-venture partners, including Eni (offshore), still awaits a final investment decision, but it’s expected shortly. The Japan-based contractor will supply the main liquefaction compressors, and Mitsubishi Hitachi Power Systems will provide dual-shaft, 120 megawatt H-100 gas turbines as the mechanical drivers.
MHI winner
According to MHI, Rovuma LNG will be “one of the world’s largest natural gas liquefaction plants in Mozambique’s remote northern area. The project plan is for two liquefied natural gas trains, each expected to produce at least 7.6 million metric tons of gas per year.
“This project will allow us to demonstrate the benefits of MHI’s LNG solution in terms of lower production costs, increased productivity, reduced complexity and lower lifecycle costs, while significantly reducing plant emissions,” MHI chief exec, Seiji Izumisawa, was quoted as saying.
Once dubbed "the Last Basin" in an article by this author, Tanzania’s Rovuma sector, too, is about to heat up. Ten years ago, Equinor had sought local “lawyers and masons”, as it sought a foothold in the country. Now, delegates of the Norwegian government, a majority owner in Equinor, are pictured on Tanzanian government Web pages taking part in host-government talks ahead of the nod for their own large-scale plans for developing remote gas in the African country.
Min. 2 LNG trains
“The (host-government agreement) will establish the fiscal, legal and commercial terms for the Onshore part of the LNG Project, just as the (production sharing agreement) defines these items for the Offshore part of the project,” Equinor has stated.
Equinor has drilled in Tanzania’s Block 2 since 2011, and 15 wells have yielded nine discoveries and estimated volumes of 20 trillion cubic feet of gas in-place. They spent $2.1 billion over six years and retain a 65 percent interest in the block (ExxonMobil 35 percent, TPDC 10 percent).
ExxonMobil and Eni in adjacent Mozambique are slightly out front with two to four potential LNG trains planned, and MHI now starting things rolling at plant estimated to cost upwards of $25 billion. Mozambique “Area 4” gas sales are now in place.
Meanwhile, Anadarko, too, has just secured gas sales deals with Pertemina and Bharat for its gas holdings in the Rovuma area.
Rovuma LNG is envisaged having two LNG trains each producing 7.6 MM t per year by 2024.