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.”