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Last Updated: May 2018

Overview


Map of Mozambique
Map of Mozambique
  • Substantial natural gas deposits discovered in Mozambique’s Rovuma basin could transform the country into a significant liquefied natural gas (LNG) exporter. International companies face significant obstacles to developing resources in Rovuma, and LNG exports are not likely to begin until after 2020. Mozambique does not produce any crude oil or have any refining capacity and relies on imports to satisfy all of its oil product demand.
  • Mozambique’s Tete province is estimated to have large, untapped coal reserves. Limited infrastructure and an unfavorable price climate had presented major challenges to developing these resources, but recent infrastructure developments have made progress in minimizing logistical constraints to exporting coal.

Natural gas

  • According to the Oil & Gas Journal, Mozambique holds 100 trillion cubic feet (Tcf) of proved natural gas reserves and is the third-largest holder of proved natural gas reserves in Africa after Nigeria and Algeria.
  • In 2016, Mozambique produced approximately 200 billion cubic feet (Bcf) of natural gas. Most of Mozambique’s production was exported (about 140 Bcf) to South Africa via the 535-mile Sasol Petroleum International Gas Pipeline, and the remainder was used for domestic consumption.
  • The U.S.-based Anadarko and Italy-based Eni are the operators leading exploration activities in Mozambique’s offshore Rovuma Basin. Anadarko made several natural gas discoveries in Area 1 (Prosperidade and Golfinho/Atum complexes), with recoverable natural gas resources estimated at 75 Tcf. Eni’s natural gas discoveries are in Area 4 (Mamba complex and the Coral site), and recoverable natural gas resources are estimated to be 85 Tcf.
  • The Prosperidade and Mamba Complexes straddle the boundaries of Areas 1 and 4. A unitization agreement (joint development of reserves that are under separate licenses) was reached in December 2015, which stipulated that Anadarko and Eni both independently commercialize 12 Tcf of natural gas in the overlapping area and jointly develop the remainder of the resources. However, both companies have prioritized developing independent projects using natural gas resources on their respective acreage. Eni reached a final investment decision (FID) in June 2017 for a floating LNG (FLNG) facility with a capacity of 163 Bcf to be located in the Coral field. The liquefaction terminal is expected to come online in 2022. Anadarko is expecting to reach an FID in the second half of 2018 to develop a two-train LNG facility with a capacity of 576 Bcf located near the Tanzanian border. The first shipments of LNG from this facility are expected to begin in 2023.

Coal

  • Coal production growth in Mozambique has slowed because of infrastructure bottlenecks and supply disruptions such as floods, rail collapses, and security risks, but recent infrastructure developments have begun to address these constraints, and progress is being made to expand the industry. Most of the coal produced in Mozambique is coking coal, also known as metallurgic coal (mostly used to produce steel), and the remainder produced is thermal coal (used for power generation). Mozambique coal is primarily metallurgical and bituminous.
  • Coal production increased to 7.3 million short tons in 2015, up from 39,000 short tons in 2010, and exported were approximately 5.7 million short tons in 2015. Customs data show that exports rose to about 13 million short tons in 2017. Mozambique consumes a small fraction of its coal production (18,000 short tons in 2015); the remainder that is not exported is stored. Coal is transported via railway from the Moatize coal mines in Tete province to the coast for export. Coal exports are destined primarily for India, the Americas, Europe, and East Asia.
  • The extension and rehabilitation of the 360-mile-long Sena railway, which transports coal from Moatize to Beira port, was completed in 2016, increasing its capacity to 22 million short tons (20 million metric tons) per year. The Sena rail line extension eliminated low transport capacity and design issues that had previous limited export volumes.
  • In May 2017, the Nacala Corridor rail and port project began operations, transporting coal from Moatize to Nacala port via a 567-mile railway. The Nacala railway has a coal transport capacity of almost 20 million short tons (18 million metric tons) per year, and the port provides an alternative export hub for Mozambican coal.
  • Another railway and port project connecting Moatize to the port of Macuse is being considered. The project is the development of a deepwater port at Macuse and a 326-mile railway line and is expected to begin construction in 2018 and to be completed by 2021.
  • Indian port company, Essar Ports, has signed an agreement in 2017 with the Mozambican government to develop a coal terminal, connected to the mines by the Sena railway line, with a capacity of 22 million short tons (20 million metric tons) per year at Beira Port. The partnership, in which Essar and the government hold 70% and 30% stakes, respectively, aims to export coal mined at Moatize to meet increasing demand, primarily in India. The first phase of the development has a capacity of 11 million short tons (10 million metric tons) per year and is expected to begin operating in 2020.

Electricity

  • According to the latest 2016 data from the International Energy Agency (IEA), 57% of Mozambique’s population living in urban areas has access to electricity, while only 15% of the rural population has access to electricity. Most of the population relies on traditional biomass and waste (typically wood, charcoal, manure, and crop residues) for household heating and cooking.
  • Total electricity production in Mozambique was approximately 20 million megawatthours (MWh) in 2015, most of which came from hydropower (87%). Total electricity consumption was 13.9 million MWh for the same year. Mozambique has the potential to further develop its solar and hydropower resources. Given its heavy reliance on hydropower, the country’s power market is particularly vulnerable to drought.
  • According to BMI Research, Mozambique generates more electricity than it consumes and exports excess generation to its neighboring countries. Construction is planned for two major transmission lines, a 200 megawatt (MW) interconnector between Mozambique and Malawi and a 1,740 MW regional interconnector between Mozambique and South Africa that also runs through southern Zimbabwe. The Mozambique-Malawi interconnector and the regional interconnector are expected to begin operating in 2018 and 2021, respectively.