East Africa's Gas Giants: Mozambique and Tanzania Set for Production Surge

Mozambique is poised for a significant increase in offshore gas production, according to a report by Westwood Global Energy Group. The nation's East African Ruvuma-Rufiji gas basin is expected to see substantial growth in the coming years, driven by major projects from international energy giants.

The Coral South project, the first to come online in the basin, is currently producing around 75,000 barrels of oil equivalent per day (boe/d). This output is projected to continue until 2027, after which Mozambique's gas production is expected to take a dramatic leap forward.

Two key developments are driving this anticipated surge: TotalEnergies' offshore Golfinho-Atum field and Eni's Coral Phase II project. However, the timeline for these projects has been affected by ongoing conflict in Cabo Delgado province.

TotalEnergies' 13MMt/year Mozambique LNG project, originally slated to begin production in 2028, has been delayed due to a force majeure declaration. The project's start-up has now been pushed back to 2037, nine years after sanctioning. This delay has had a knock-on effect on Exxon Mobil's Rovuma LNG project, which initially planned to share certain facilities with the Mozambique LNG project.

In response to the delay and the ongoing challenges, Exxon Mobil has taken steps to streamline its Rovuma LNG project. Westwood analyst Michela Francisco reports that Exxon Mobil has revised the design plan, reducing costs by switching from a two-train 15.2 MMt/year proposal to an 18 MMt/year complex built using a modular approach.

Exxon Mobil has also initiated the tender process for a Front-End Engineering Design (FEED) contract and an Engineering, Procurement, Construction, and Installation (EPCI) option for the subsea-to-shore gas gathering facilities. These developments indicate a continued commitment to the Rovuma LNG project despite the delays and complexities.

While the conflict in Cabo Delgado has undoubtedly impacted project timelines, it has not deterred the overall ambition for gas production in Mozambique. The government's commitment to tackling the security challenges, coupled with the resilience of the international energy companies involved, suggests a positive outlook for the future of this important gas basin.

Tanzania, a neighbour to Mozambique, is also preparing to significantly increase its natural gas production. The country is expected to see its first liquefied natural gas (LNG) production come online in 2025, with the launch of the $30 billion LNG project on the island of Unguja. This project is expected to unlock substantial opportunities for Tanzania's energy sector and contribute significantly to the country's economic growth.

The combined efforts of Mozambique and Tanzania in developing their vast offshore gas resources hold the potential to transform the region into a major energy hub. The future of East Africa's gas sector appears promising, with the region poised to become a key player in the global energy market.