Prospects improving for gas mega-projects offshore Mozambique and Tanzania, report finds

Mozambique looks set for a steep ramp-up in offshore gas production, according to a report by Westwood Global Energy Group.

Coral South, the inaugural project onstream in the East African Ruvuma-Rufiji gas basin, should continue producing about 75,000 boe/d through 2027.

Thereafter, Mozambique’s gas output could soar, driven by TotalEnergies’ offshore Golfinho-Atum field development and Eni’s Coral Phase II.

Due to conflict locally in Cabo Delgado province, TotalEnergies’ enforced force majeure on the 13MMt/year Mozambique LNG project, delaying the originally planned production start from Golfinho-Atum field to 2028, nine years post-sanction.

There was a knock-on effect at Exxon Mobil’s Rovuma LNG project, as the plan was to share certain facilities in the Mozambique LNG project. But Exxon Mobil has since moved to reduce costs, according to Westwood analyst Michela Francisco, by revamping the design plan from the initial two-train 15.2 MMt/year proposal to an 18 MMt/year complex that is now being built using a modular approach.

Exxon Mobil has since invited tenders for a FEED contract and an EPCI option for the subsea-to-shore gas gathering facilities.

Courtesy Westwood Wells & Production Outlook

East African Ruvuma-Rufiji (EARR) Gas Basin Production Profile 2017-2030

East African Ruvuma-Rufiji (EARR) Gas Basin Peak Production from Upcoming Fields 2024-2030

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Drilling activity in the gas basin offshore Mozambique and Tanzania to the north has averaged just one well per annum over the past five years, but about 50 wells could soon be drilled to support upcoming LNG projects in Mozambican deepwater, Francisco claimed.

Out of this total, 27 subsea trees have already been awarded (between 2017 and 2019) for Coral South and Golfinho-Atum, and 30 further subsea trees should follow, including six for Eni’s Coral North field, where FID is expected before the end of the year.

To the north, the $40-billion Tanzania LNG project, which would exploit from six deepwater fields across blocks 1 and 4 (Shell) and Block 2 (Equinor), has stalled due to negotiations over fiscal terms governed by domestic supply obligations.

But after 2030, the outlook for the basin could be more promising, with growing interest from international energy companies, along with concession award announcements made by both countries since 2023.

For Tanzania, Shell and Equinor proposed a $42-billion LNG project from their three deepwater blocks in March 2023, with CNOOC’s expressing interest three months later in a deepwater FLNG development in blocks 4/1B and 4/1C.

What could drive E&A drilling higher was the launch this March of an inaugural five-year licensing round by the semi-autonomous government of Zanzibar, offshore Tanzania, which invited bids to explore eight offshore blocks.

Exploration drilling could also resume offshore Mozambique, with the National Hydrocarbon Company last month approving a concession contract for oil exploration and production in the Angoche A6-C Area.

By the early 2030s, the basin could be producing about 295,000 boe/d to support global LNG demand. But the Mozambican government needs to stamp out insurgency to speed up the progression of projects offshore Cabo Delegado province, which is mostly stuck in the FEED phase.

Offshore Tanzania, the focus needs to be on improving fiscal terms to attract more near-term investment and ensure that current interest from international companies is maintained, Francisco concluded.