Exxon awards contract for Africa’s biggest-ever private project

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US energy giant Exxon Mobil has awarded a contract to a group led by Japan’s JGC Corporation to develop its Mozambique liquefied natural gas (LNG) project, which is set to be the biggest ever private investment in Africa.

JGC will be joined by Fuor Corporation and TechnipFMC to develop the Rovuma LNG project.  The facility will cost between $27bn and $33bn, according to March estimates by South Africa’s Standard Bank Group.

According to Exxon’s Senior Vice-President for LNG Peter Clarke, preliminary activities costing $500 million will start soon.  A final investment decision (FID) is expected next year, and production will probably start in 2025, Clarke added.

The government approved sales and purchase agreements (SPAs) for the gas, Exxon said, adding that it has adequate buying commitments to enable the project to close financing.

Rovuma’s planned output is 15.2 million tonnes of LNG per year, higher than a nearby project that France’s Total is developing with a capacity of 12.9 million tonnes. Mozambique, one of the poorest countries in the world, is looking to the projects to lift its $15bn economy.

Exxon’s announcement comes before the country goes to the polls next week in which President Filipe Nyusi is seeking re-election. Nyusi, whose campaign will be boosted by progress on gas investments, has struggled to quell an insurgency that’s rocked the gas-rich region over the past two years.

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