Rovuma LNG set to transform Mozambique’s GDP growth: Standard Bank

Dele Kuti Standard BankThe Rovuma LNG is expected to attract between US$27bn and US$32bn investment, transforming Mozambique’s GDP growth, according to a study by Standard Bank

Once developed, the project aims to monetise 2.6 bcf per day of Mozambique’s offshore LNG resources and add US$15bn to US$18bn per annum to Mozambique’s GDP, driving Mozambique towards being the world’s fourth largest producer of LNG.

“The first phase of Rovuma LNG has the potential to transform the Mozambican economy and turn the province of Cabo Delgado into one of the world’s fastest growing regions, with every prospect of developing supporting industrial and agricultural value chains,” said Dele Kuti, head of oil and gas for Standard Bank Group.

The development of Rovuma LNG aims to place Mozambique in pole position to become a long-term leading supplier of LNG to some of the world’s largest economies, including China, as they deepen fuel-switching policies aimed at replacing coal with cleaner gas as an energy source.

The Rovuma LNG project’s first phase is targeting a final investment decision in 2019.

The Rovuma LNG is further set to employ approximately 20,500 construction workers and 1,300 operational workers. The project’s activities are also expected to create many more additional employment opportunities from various value chain and reinvestment activities associated with the support, supply and profits arising from the commercial operation of Rovuma LNG.

“It is anticipated that the development of domestic gas industry in Mozambique will help the government achieve its vision of having a domestic gas sector running parallel to its LNG export capability. This will drive broader national development and social transformation, especially with regard to domestic small and medium-sized enterprise formation,” noted Paul Eardley-Taylor, head of oil and gas, Southern Africa, for Standard Bank.

On a cautionary note, the Standard Bank’s study reveals that any delays to Rovuma LNG would have a negative economic impact upon achieving the projected targets.

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