What First LNG Export Means for Mozambique

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What is the Coral Sul FLNG project?

Located in the Rovuma Basin offshore Mozambique, the Coral Sul project comprises an FLNG facility with the capacity to produce 3.4 million tons per annum (mtpa) of LNG. Linked to six subsea gas-producing wells, the project produces and sells gas from the southern part of the country’s lucrative Coral field – located in Area 4 of the Rovuma Basin – with estimated reserves of 140 billion cubic meters of gas.

While a series of security threats coupled with impacts attributed to the COVID-19 pandemic caused delays in project development, in 2021, the FLNG facility arrived in the country and first gas was introduced to the vessel in June 2022. In November 2022, the country celebrated the first shipment of LNG to Europe.

What does First Export Mean Globally? 

While Mozambique has been a gas producer since 2004 through the commercial production of gas at the Pande onshore gas field, Coral Sul represents the first offshore development and first-ever LNG export – an achievement that could not come at a better time both for the country and global energy markets. For Europe, the LNG shipment comes when the bloc is urgently seeking alternative LNG suppliers, as the move to reduce reliance on Russian gas has unleashed an energy crisis across the European continent. As the bloc enters into its winter months and demand grows substantially, new supplies from Mozambique could bring the much-needed relief that Europe needs.

What does First Export Mean for Mozambique?

The benefits of first export go beyond supply easings internationally. For Mozambique, the commercialization of offshore gas reserves will bring in significant export revenues that can help kickstart industrialization and broader socioeconomic growth for the developing nation. With the project set to position the country as one of the world’s top ten biggest LNG exporters, the associated influx in foreign revenue will be key to accelerating both infrastructure and sub-sector development. The country expects to make an estimated $96 billion in revenue over the lifetime of the Rovuma gas reserves – approximately five times the country’s current GDP.

With improved revenue generation, Mozambique is set to witness unprecedented growth across the socioeconomic spectrum, with specific focus being placed on infrastructure, national electrification and  industrial development. Furthermore, these opportunities will not be exclusive for the country, but rather, the entire southern African region will benefit. As it stands, neighboring countries such as South Africa, Zimbabwe and Zambia continue to face inconsistent power supplies, with both COVID-19 and geopolitical impacts deepening existing energy crises. With over 600 million people without access to electricity in sub-Saharan Africa, Mozambican gas supplies could be the solution the continent needs.

While Coral Sul is focused predominantly on exports, its start of production signals new opportunities for other projects in the basin to resume development, thereby increasing domestic capacity and regional exports. Security threats owing to an insurgency in the northern province of Cabo Delgado in Mozambique have not only impacted Coral Sul, but also caused delays and declarations of force majeure for other developments, including TotalEnergies’ 12.8-mtpa Mozambique LNG project. Nevertheless, the French major is targeting first LNG production as early as 2023, owing largely to efforts undertaken by the Mozambican Government to address the security situation and regain stability in the province.

In addition to its economic opportunities, the Coral Sul project is set to usher in a new era of domestic growth, in part due to the specific local content requirements placed on development. With the aim of improving capacity building and skills and technology transfer, the Government of Mozambique has ensured that the development will translate into tangible employment opportunities for the local population, with 858 new direct, indirect and induced jobs created through the life cycle of the project. As new projects come online and Coral Sul ramps up production, the people and the national economy of Mozambique stand to benefit.

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Energy Capital & Power

Energy Capital & Power

Energy Capital & Power is the African continent’s leading investment platform for the energy sector. Through a series of events, online content and investment reports, we unite the entire energy value chain – from oil and gas exploration to renewable power – and facilitate global and intra-African investment and collaboration.
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