Mozambique picks winners for domestic gas mega-projects

Author: Zitamar News
Date: 2017-01-30

Mozambique’s ministry of mineral resources and energy (MIREME) has selected three international companies to develop a gas-to-liquids (GTL) project, a fertiliser plant and a power plant using the domestic gas allocation from the Rovuma Basin.

Shell has been allocated 310-330 million cubic feet per day (MMcf/d) of gas from the Area 1 and Area 4 offshore gas fields in the far north of the country, to fuel its proposed 38,000 barrels per day GTL plant which will produce synthetic diesel, naptha and kerosene, and 50-80 MW of power.

Updated at 11:59 on 30 January 2017, to correct GTL production capacity]

Norwegian fertiliser giant Yara International will build a 1.2-1.3 mtpa fertiliser plant and will generate 30 to 50 MW of power, using 80-90 MMcf/d of domestic market gas.

Finally, London-based GL Africa Energy will be allocated 41.8 MMcf/d of gas to build a 250 MW power plant.

A total of fourteen bids were submitted under the domestic gas tender, managed by Mozambique’s petroleum regulator, INP.

None of the projects pitched by local companies were successful. These included bids from state electricity company, EDM; Maputo-based private equity investor, Epsilon investimentos; Gasnosu, a company planning to pipe gas from the Rovuma Basin to South Africa; Autogás, a Mozambican company which supplies gas to fuel vehicles including part of Maputo’s fleet of public buses; as well from three previously unknown Mozambican bidders: UNION-JNC-JSPDI-VBC-SAL Consortium, Muinvest, and MOTSE.

Yara beat off competition from several other international fertiliser producers to have its project selected, including bids from Pakistani state-owned Engro Fertilizers, Sinochem Jiangsu Construction Co. – whose fertilizer division, Sinofert, is the largest fertilizer supplier and distributor in China –  and Japanese conglomerates Mitsui and Marubeni.

Mozambique is also tendering for a company to take on a phosphate deposit in Nampula province, which could be used to supply the fertiliser plant.

The domestic gas tender, which INP launched on 26 August, offered bidders up to 100 million cubic feet a day of gas (MMcf/d) at $2.5 per gigajoule, to become available when the Area 1 project comes online in around 2022. An additional 300 MMcf/d of supply could be negotiated with the Area 1 and 4 concessionaires, INP said.

The allocations announced today add up to a total of between 432-462 MMcf/d.