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Exxon to make $500M initial investment in Mozambique LNG

Exxon Mobil plans to invest more than $500 million in the initial construction phase of its liquefied natural gas (LNG) project in Mozambique.

The U.S. oil company's $30 billion Rovuma LNG project, jointly operated with Italy's Eni, has a capacity of more than 15 million tons a year (mtpa) and is set pump much-needed cash into the southern African nation's ailing economy.

"The Area 4 partners will advance midstream and upstream area project activities of more than $500 million as initial investments," Exxon head of power and gas marketing Peter Clarke told a ceremony in Mozambique's capital Maputo on Tuesday.

Construction of onshore facilities has been awarded to a consortium led by Japan's JGC, U.K firm TechnipFMC and U.S. company Fluor Corp.

"These EPC (engineering, procurement and construction) contracts cover the construction of two natural gas production trains with a total capacity of 15.2 million tons per annum, as well as associated onshore facilities," Clarke said.

Final investment decisions, a term used by the oil industry to mean the commercial and regulatory aspects of a project are finalised, would be made in 2020, Clarke said.

Mozambique, among the poorest countries in the world, holds presidential elections on Oct. 15, and the investments stand to boost President Filipe Nyusi's popularity and ease growing frustrations over unemployment and poverty.

The Exxon project, along with Total's $20 billion 13 mtpa facility and Eni's $8 billion 3.4 mtpa floating plant, mean Mozambique will have the ability to export 31 mtpa of natural gas, about 10% of today's global market.

South Africa's Standard Bank said in a March report revenue from the gas investments could lift annual economic growth past 5% and household per capita income by 50% over the 2018 average.

(Reporting by Manuel Mucari; writing by Mfuneko Toyana; editing by Jason Neely and Alexander Smith)


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FEATURED COLUMNS

Editorial Comment: The Future of FLNG: Less is More?
-Adrienne Blume
Global LNG export capacity is expected to increase by 45% between 2017 and 2022, to more than 400 metric MMtpy, with 90% of the new capacity coming from sanctioned projects in the U.S. and Australia. By 2050, this capacity is anticipated to exceed 700 MMtpy. Regasification capacity is anticipated to increase even more sharply.
Executive Viewpoint: Back to production: Where we’re going, we don’t need pipelines
-Mark Casaday
What if a cost-effective way existed to extract and distribute natural gas, regardless of proximity to pipeline, and bring those assets back to production? What if the industry went in a direction that did not need pipelines? For those looking to monetize unproductive natural gas assets or bring unproductive wells back to production, it would be revolutionary.
Regional Focus:Australia to boost LNG exports despite domestic gas shortage
-Eugene Gerden
Australia is planning further increases in LNG production and exports over the next decade, despite quickly depleting reserves and a looming supply shortage in the domestic market.


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