Mozambique
is set to be Africa’s next biggest gas producer, joining big-wigs such as
Angola and Nigeria in gas production by 2028 once its
offshore natural gas , (the biggest ever discovered on the continent),
reaches full production capacity as planned, the International Monetary Fund
(IMF) said in recent report.
The IMF predicts
that Mozambique’s economy has the potential to grow by 24% annually between
2021 and 2025 before decelerating to about 3-4% by 2028. “After liquefied natural gas production
reaches its peak level in 2028, with the final liquefaction train starting
operation, the real gross domestic product growth will moderate to 3 percent to
4 percent,” the IMF predicted.
Natural gas was discovered in 2010 in Rovuma Basin in the Cabo Delgado
province where the reserves were estimated at 180 trillion cubic feet, the
equivalent of Nigeria’s entire gas reserves.
The Southern
African country could become the 3rd largest LNG exporter after
Qatar and Australia once gas production reaches its peak.
Plans are underway
by Anardako from US and ENI from Italy to construct Liquified Natural Gas (LNG)
plants worth hundreds of billions of dollars to process the gas.
The prediction by
IMF is grounded on the expectation that the two operators will take their Final
Investment Decision (FID) by mid this year.
However the IMF
has acknowledged that the significant drop in gas prices and further price
decreases could threaten the viability of the planned LNG plants. The fall in commodity prices of Mozambique’s
other main exports coal, cotton, sugar and aluminium has caused a cash crunch
in the nation. Frost and Sullivan state in another report that “The volatility
of oil and gas prices can restrain the development of a gas hub in Mozambique.”
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