Mozambique Moves Towards LNG Production

Western interest on Africa's energy reserves is intensifying.

Houston's Anadarko oil and gas company has proposed to Mozambique's government establishing a Liquefied Natural Gas facility capable of producing a billion cubic feet of gas a day in northern Mozambique.

Anadarko's exploration concession blocks cover both onshore and offshore areas in the Palma and Mocimboa da Praia in Cabo Delgado province districts, and exploratory drilling has uncovered large deposits of natural gas in four of Anadarko's seven exploratory wells, Agencia de Informacao de Mocambique reported.

Anadarko has so far invested $750 million in Mozambique's Rovuma basin and projects investment costs to exceed $3 billion by the end of 2013. If Anadarko's plans for an LNG facility are approved, Anadarko's eventual investment could rise to $15 billion 2018, which would be by far Mozambique's largest foreign investment.

Mozambique's National Petroleum Institute chairman Arsenio Mabote is advocating that some of the natural gas be retained for use in Mozambique to produce fertilizers and methanol and also electricity generation for the country's northern provinces.

By. Joao Peixe, Deputy Editor OilPrice.com