Exxon Mobil plans to invest more than $500 million in the initial construction phase of its liquefied natural gas (LNG) project in Mozambique.
The U.S. oil company’s $30 billion Rovuma LNG project, jointly operated with Italy’s Eni, has a capacity of more than 15 million tonnes a year (mtpa) and is set pump much-needed cash into the southern African nation’s ailing economy.
“The Area 4 partners will advance midstream and upstream area project activities of more than $500 million as initial investments,” Exxon head of power and gas marketing Peter Clarke told a ceremony in Mozambique’s capital Maputo on Tuesday.
Construction of onshore facilities has been awarded to a consortium led by Japan’s JGC, U.K firm TechnipFMC and U.S. company Fluor Corp.
“These EPC (engineering, procurement and construction) contracts cover the construction of two natural gas production trains with a total capacity of 15.2 million tons per annum, as well as associated onshore facilities,” Clarke said.
Final investment decisions, a term used by the oil industry to mean the commercial and regulatory aspects of a project are finalised, would be made in 2020, Clarke said.
Mozambique, among the poorest countries in the world, holds presidential elections on Oct. 15, and the investments stand to boost President Filipe Nyusi’s popularity and ease growing frustrations over unemployment and poverty.
The Exxon project, along with Total’s $20 billion 13 mtpa facility and Eni’s $8 billion 3.4 mtpa floating plant, mean Mozambique will have the ability to export 31 mtpa of natural gas, about 10% of today’s global market.
South Africa’s Standard Bank said in a March report revenue from the gas investments could lift annual economic growth past 5% and household per capita income by 50% over the 2018 average.