Exxon considers resuming shelved LNG project in Mozambique with bigger production targets

Matthew Hill, Bloomberg March 20, 2023

(Bloomberg) – Exxon Mobil Corp. is considering resuming a liquefied natural gas project in Mozambique, but with an even bigger capacity than the one it shelved partly because of an Islamic State-linked insurgency.

In a statement published Friday in Mozambican newspaper O Pais, the U.S. energy giant called for expressions of interest to design and build an LNG plant producing as much as about 18 million tons a year. Earlier plans envisaged a 15.2 million-ton project.

Exxon’s announcement comes after TotalEnergies SE said last month that it’s considering restarting its own LNG export venture Mozambique’s Cabo Delgado province. The projects were halted two years ago following an attack on the town of Palma, but a mix of local and foreign troops have since made progress in containing the violence that’s left more than 4,600 people dead.

The LNG projects offer an economic lifeline for impoverished Mozambique, with potential investments exceeding the southern African nation’s annual output. The government has also been counting on LNG export revenues to service its debt, including a $900 million eurobond.

Exxon is part of a consortium with Eni SpA of Italy, which in November exported Mozambique’s first LNG production from a floating vessel offshore. That plant has an annual capacity of 3.4 million tons.

The much larger onshore project would involve modules of 1.5 million tons, according to the company’s statement. The deadline for submitting expressions of interest is the end of this month.

“Modular is attractive, and potentially the best solution in Mozambique, from the standpoint that it offers the opportunity to build at scale while also mitigating some of the security risks during construction,” said Alex Munton, director of global gas service at Rapidan Energy Group.

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