ExxonMobil and its partners have awarded approximately $1.1 billion in contracts for long-lead equipment and early work on Mozambique’s Rovuma LNG Phase 1 project, marking another major step toward a final investment decision.
The awards cover subsea production systems, large-bore valves and several types of offshore line pipe required to develop the Area 4 gas resources offshore Cabo Delgado.
ExxonMobil Mozambique is advancing the project on behalf of the Area 4 partners, which include Mozambique’s state-owned ENH, China National Petroleum Corp., Eni, Korea Gas Corp. and Abu Dhabi-based XRG.
The largest contract was awarded to OneSubsea UK and OneSubsea AS for engineering, procurement and manufacturing of subsea production systems, controls and umbilicals. Aker Solutions Mozambique will support work carried out in the country.
Other contracts went to Advanced Technology Valve for production valves; Corinth Pipeworks and Sumitomo Corporation of America for line pipe; and China’s Zhejiang Jiuli Hi-Tech Metals for mechanically lined pipe and related equipment.
Committing capital before FID allows manufacturers to begin work on equipment with particularly long production and delivery schedules. For large LNG developments, early procurement can reduce the risk that supply-chain bottlenecks delay construction once full project approval is secured.
The scale of the awards is also a significant indication that ExxonMobil and its partners are positioning Rovuma LNG for execution, even though the contracts do not themselves constitute a final investment decision.
Rovuma LNG is designed to develop offshore gas reserves in Mozambique’s Area 4 and supply an onshore liquefaction complex with planned capacity of 18.6 million tonnes per year. At that scale, the project would be one of the larger new LNG export developments under consideration globally and could materially expand Mozambique’s role in international gas markets.
Mozambique holds some of the largest discovered natural gas resources in Africa, but development of its LNG industry has faced years of delays, including security concerns in the northern province of Cabo Delgado and disruptions affecting competing projects in the region.
Rovuma LNG would add another major source of LNG supply from East Africa at a time when producers are competing to sanction projects capable of meeting expected global gas demand in the 2030s.
By Charles Kennedy for Oilprice.com