Indian hopes for a natural gas bounty from its offshore holdings in Mozambique have been put off until 2022. ONGC Videsh, Oil India and Bharat Petroleum control 30% of the Rovuma Area 1 offshore gasfield with proven reserves of 75 trillion cubic feet. It had originally been hoped gas production would start by 2019.

The reasons for the delay seems to be threefold. Political and economic instability in Mozambique has slowed down decision making in the country. The other consortium partners are unenthusiastic about fast tracking production at a time when global gas prices are at an all-time low. Finally, the liquefied natural gas terminal needed to transfer the gas shows no signs of being constructed, partly because of the costs involved. “We expect a delay of at least two years,” said managing director OVL, N. K. Verma, in the Economic Times.

Meanwhile, Essar Ports announced in January that it would be building a new coal terminal in Mozambique following the completion of a rail link from the coast to interior coal mines.

The same month Standard Chartered and a consortium of financiers announced they had secured multi-billion-dollar funding to build a floating LNG complex for Mozambique and kickstart the country’s long-awaited shift towards being a major energy exporter.

 

January 31, 2018

About the Author

Pramit Pal Chaudhuri writes on political, security, and economic issues. He previously wrote for the Statesman and the Telegraph in Calcutta. He served on the National Security Advisory Board of the Indian government from 2011-2015. Among other affiliations, he is a member of the Asia Society Global Council, the Aspen Institute Italia, the International Institute of Strategic Studies, and the Mont Pelerin Society. Pramit is also a senior associate of Rhodium Group, New York City, advisor to the Bower Group Asia in India, a member of the Council on Emerging Markets, Washington, DC, and a delegate for the Confederation of Indian Industry-Aspen Strategy Group Indo-U.S. Strategic Dialogue and the Ananta Aspen Strategic Dialogues with Japan, China and Israel. Born in 1964, he has visited over fifty countries on five continents. Mr. Pal Chaudhuri is a history graduate from Cornell University.