In the race to first gas in East Africa, a clear frontrunner has emerged at the SPE Offshore Europe UKTI East African briefing yesterday, and that country is Mozambique, with huge finds and notable projects heating up.
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Image from Anadarko. |
The US Energy Information Administration has Mozambique’s proven resources exceeding 100 Tcf. Italian explorer Eni holds Mozambique’s Area 4, which is the world’s fifth largest natural gas discovery in the last 30 years with more than 85 Tcf estimated natural gas resources in place. US independent Anadarko Petroleum, which operates Area 1, has more than 75 Tcf of recoverable natural gas resources since 2010.
The two oil companies are seeking to develop the resources through LNG options, Anadarko with an onshore hub at Palma, and Eni opting for a floating LNG option. In 2015, Anadarko chose a consortium consisting of CB&I, Chiyoda Corp. and Saipem to FEED services for the onshore LNG terminal. However, Anadarko is expected to come to a final investment decision (FID) on the project by 1Q 2016. Eni is expected to reach a FID on the Coral FLNG project by 4Q 2015.
Additionally, Shell and Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH) began a feasibility study for GTL plant.
Despite these successes, Mozambique shares struggles similar to its other East African neighbors. Countries such as Kenya, Uganda, and Tanzania, which are struggling with a lack of infrastructure that includes little to no roads or rail services to support the oil and gas industry.
Additionally, there is also a lack of an educated or skilled workforce. There’s also political challenges such as bureaucracy that can lower the ease of doing business, as well as changing legislation regarding taxes, royalties, production share, and local content rules. And even the discoveries themselves can prove challenging. East Africa has a very narrow continental shelf. The steep slopes will pose significant challenges for identifying suitable routes and landfalls for future flowlines and pipelines.
But ultimately, the mood at the UKTI function was positive that East Africa is open for business for those willing to roll up their sleeves and do the hard work.
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