Mozambique is set to attract investments of about $6bn from India based on the involvement of India’s state-owned oil companies in the Rovuma basin, where liquid natural gas (LNG) projects are under development.
Indian companies, Oil and Natural Gas Corporation (ONGC), Oil India and Bharat Petroleum Corporation (BPCL) jointly own 30 percent of Rovuma Area 1, which is expected to host two LNG plants with a combined capacity to ship 10 million metric tonnes of LNG annually from 2018. The Indian companies have already spent a combined $6bn, according to information from the Indian petroleum ministry. However, they are likely to still invest another $6 billion over the next three years as they look to quickly develop the Rovuma LNG plans.
This investment by India in Mozambique further reaffirms the growing relationship between East and Southern African countries and Asia predicated on the oil and gas resources in the region. As Asian countries look to secure their energy future, the huge gas resource offshore Mozambique and Tanzania is set to attract considerable Asian interest. Although gas projects in East Africa face competition from the Middle East, Australia and the US, they remain very competitive on costs. Furthermore, Mozambique’s government has enacted a decree law supporting the development of LNG projects with significant tax concessions.