India approves MoU with Mozambique on oil & gas

India - Mozambique sign MoU01 November 2014, Maputo — The Indian government on Wednesday gave its approval for the signing of a Memorandum of Understanding (MoU) between India and Mozambique for cooperation in the oil and gas sector.

Meeting in the Indian capital, New Delhi, the Cabinet was chaired by Prime Minister Shri Narendra Modi.

A government statement explained that “Mozambique is strategically located near India and is ideally suited for bringing natural gas to India”. It added, “the participation of Indian energy companies will facilitate access to liquefied natural gas (LNG) for the growing Indian gas market”.

The MoU seeks cooperation in the oil and gas sector, both upstream and downstream. In addition it aims to encourage and promote trade and investment, increase dialogue and facilitate the transfer of technology.

Over the last five years the known gas reserves in Mozambique have increased from five trillion cubic feet to over 200 trillion cubic feet.

The Mozambican government estimates that fifty billion US dollars in investment will be required to market the gas discovered off the country’s northern coast.

The operators of Area 1 and Area 4 in the Rovuma Basin both plan to liquefy the gas before transporting it in refrigerated tankers to market. The US company Anadarko intends to pipe its gas to Palma in Cabo Delgado province for processing. Meanwhile, Italy’s ENI is looking at building a floating platform to produce the LNG.

The companies are working under the increasingly tight schedule of making the first shipment in 2018. Once exports begin, Mozambique will become one of the world’s main producers of LNG.

Last week the Mozambican government announced that it is calling for bids from companies wishing to explore fifteen new blocks covering an area of 76,800 square kilometres. It hopes that both gas and petroleum will be discovered.
*Paul Fauvet – AIM

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