Africa’s largest private investment inches closer to making a financing decision.
- What: Operator ExxonMobil Mocambique has provided McDermott with a letter of intent to commence limited engineering and procurement services for Rovuma LNG.
- Why: The project’s partners are keen to make a final investment decision in the coming months, while nearby project Mozambique LNG has been pushing ahead with construction.
- What Next: The financing decision is expected to be taken before the end of the year, while start-up of the LNG facility is forecast for 2031.
Africa’s largest private investment, Rovuma LNG has creeped forward as the project’s operator ExxonMobil Mocambique provided a letter of intent on August 6 to US contractor McDermott to begin limited engineering and procurement services.
The project’s partners ExxonMobil, Eni, and China National Petroleum Company (CNPC) had initially been targeting making a final investment decision (FID) by September, but have now scaled back timelines to making a decision before the end of 2026.
The $20 bn project will consist of 12 modular trains and boast a production capacity of 18.6 mn tonnes per year (tpy). The facility, located on Mozambique’s northeastern coast in Cabo Delgado province is expected to come online in 2031. The project represents ExxonMobil’s largest single investment.
McDermott will build on its experience in Mozambique. The Houston-headquartered contractor is also working on the nearby Mozambique LNG project with Italy’s Saipem and Japan’s Chiyoda.
“Our work on Rovuma LNG builds on McDermott’s established LNG expertise in Mozambique and our disciplined approach to execution,” Michael McKelvy, McDermott’s Chief Executive Officer and Chair of the Board said in a statement.
“Our experience on Mozambique LNG, combined with our long-term commitment to the country, positions us to deliver critical infrastructure that supports Mozambique’s emergence as a major global LNG supplier,” McKelvy added.
McDermott executed the front-end engineering design (FEED) and will handle the modular liquefaction engineering. It will also be part of the broader SMDC consortium.
Within the consortium, Saipem will provide offshore and onshore energy infrastructure expertise and South Korea’s Daewoo will specialize in plant construction. China Petroleum Engineering & Construction Corporation (CPECC) will offer the group extensive large-scale construction capabilities.
Maputo has high hopes for Rovuma LNG. The project is projected to bring in about $150 bn in revenues for Mozambique over its 30-year lifespan. Moreover, the project is expected to add approximately $11 bn annually to the country’s GDP, while also providing jobs for over 150,000 people, according to a study conducted by Standard Bank.
Progress on the nearby Mozambique LNG has also raised hopes for FID to be taken shortly for Rovuma. Mozambique LNG, which is also being built in Cabo Delgado province is close to 45% complete with production at its first liquefaction train projected to begin in 2029.
The discovery of natural gas in the Rovuma Basin is located in the deep waters off the coast of Cabo Delgado province has provided enormous optimism for Mozambique to become a powerhouse in the hydrocarbon sector.
