MAPUTO, Mozambique — ExxonMobil and its partners have awarded approximately $1.1 billion in pre-investment contracts for critical equipment and early construction activities linked to the Rovuma LNG Phase 1 project in Mozambique’s Cabo Delgado province.
The contracts represent a significant step toward developing one of Africa’s largest planned liquefied natural gas projects and demonstrate the partners’ commitment to moving the development toward a final investment decision (FID).
The awards cover long-lead equipment that will be required for the project’s upstream operations. This includes subsea production systems, large-bore production valves and offshore line pipe, among other activities.
Major Investment in Mozambique’s Gas Sector
The Rovuma LNG project is being developed by the Area 4 partners, which include Mozambique’s Empresa Nacional de Hidrocarbonetos (ENH), CNPC, Eni, KOGAS and XRG, with ExxonMobil leading the development and operation of the onshore LNG facilities.
The project is designed to process Mozambique’s substantial offshore natural-gas resources and produce approximately 18.6 million tonnes of LNG annually. ExxonMobil has said the project could ultimately generate about $150 billion in revenue for the Government of Mozambique over its lifetime.
The latest contracts follow another major development earlier this month, when the Area 4 partners selected the SMDC joint venture for the midstream engineering, procurement and construction work associated with the project.
Project Had Been Delayed
Rovuma LNG has faced significant delays because of the security situation in northern Mozambique.
ExxonMobil suspended activities on the project in 2021 following an insurgent attack near Palma in Cabo Delgado. The company subsequently lifted the project’s force majeure and has been working to restart development activities.
The return of major contractors and the award of pre-investment contracts indicate that the project is now moving into a more active development phase.
However, security remains an important consideration because Cabo Delgado continues to face an Islamist insurgency.
FID Expected by Year-End
ExxonMobil is currently targeting a final investment decision by the end of 2026. The latest contracts do not constitute the final investment decision, but they demonstrate that preparations for the project’s execution are advancing.
For Mozambique, successful development of Rovuma LNG could transform the country’s economy.
The project has the potential to attract billions of dollars in foreign investment, generate government revenues, create employment and strengthen Mozambique’s position in the global LNG market.
It could also provide new opportunities for local businesses and contractors if Mozambique succeeds in increasing domestic participation in the project’s supply chain.
Strategic Importance for Africa
The development comes at a time when global energy markets are seeking new sources of LNG.
Mozambique possesses enormous offshore gas reserves, and the successful development of projects such as Rovuma LNG could make the country an increasingly important energy supplier to international markets.
For ExxonMobil and its partners, the challenge will be to balance the enormous commercial opportunity with security, infrastructure and execution risks.
For Mozambique, the priority will be ensuring that the country’s natural-gas wealth translates into broad-based economic development.
With $1.1 billion already committed through pre-investment contracts, attention now turns to whether the partners will deliver the final investment decision before the end of the year.
