Mozambique, Tanzania lead African charge

Mozambique, Tanzania lead African charge

Tanzania and Mozambique already have combined reserves of 110 tcf (trillion cubic feet) and so could easily become one of the world’s big three centres of production. Nigeria took about 12 years to achieve LNG (liquefied natural gas) production capacity of 25m tonnes year. As a result, expectations of first gas by 2018 from East Afica are optimistic.

It has been announced that Eni and Anadarko have binned plans for separate liquefied natural gas (LNG) projects in Mozambique in favour of joint development. This brings the prospect of gas exports from the region a good deal closer and should focus minds in the governments of both Mozambique and Tanzania. Taken together, Mozambique and Tanzania form the most exciting new gas province in the world. Even if some gas is marketed locally, it will scarcely make a dent in the vast reserves that have already been identified.

The region is therefore geographically well placed to export LNG to the world’s biggest LNG importing states: Japan, South Korea and Taiwan, plus the biggest emerging LNG markets: China and India. There is one international comparison that is worth making. With reserves of 180-230 trillion cubic feet (tcf), Australia is expected to become the world’s biggest LNG producer within a decade, with production capacity of about 85m tonnes a year. On the back of far less exploration work to date, Tanzania and Mozambique already have combined reserves of 110 tcf and so could easily become one of the world’s big three centres of production, alongside Australia and Qatar.

As a rough rule of thumb, it takes reserves of at least 1 tcf to enable 1m tonnes a year of LNG production capacity, with investors needing to ensure production over at least two decades. It should therefore be possible for the region as a whole to acquire production capacity of 100m tonnes a year. Estimates for the wider region are even more impressive. Although such figures are necessarily speculative, the US Geological Survey estimates that Kenya, Tanzania, Mozambique, Madagascar and the Seychelles could hold up to 441 tcf of natural gas.

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Written by African Business Magazine

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