Brussels is exploring all options for getting energy resources from around the world as the risk of cutting off Russia’s energy supply to the EU increases. Mozambique is grabbing the attention of the EU in Africa. In fact, liquefied natural gas (LNG) reserves were found in the Cabo Delgado region off the northern coast of Mozambique in 2012, compelling the government to invest approximately $20 million to utilize these reserves. Planning for the project has already begun, and LNG delivery is scheduled to begin in early 2024. This abundant supply is a blessing for the EU, which has vowed to find less expensive gas alternatives to US gas after ceasing to receive Russian gas. The EU should now take Mozambique into account as a viable alternative as part of its plan to diversify its energy supplies.
On 5 July, Italian President Sergio Mattarella travelled to Mozambique to meet with his counterpart, Filipe Nyusi, to negotiate the exploitation and supply of Mozambican gas to Italy. The large gas reserves available in Mozambique led the new EU ambassador to the country, Antonino Maggiore, to state that “with the amount of gas that exists, Mozambique is automatically positioned as an alternative to meet the needs that currently exist and the sooner the country can put its gas on the market, the greater the possibility of taking advantage of the current crisis caused by the Russian-Ukrainian conflict”.
Although Mozambique already has its first LNG liquefaction platform – called Corel-Sul – with an annual production capacity of almost 3.5 million tonnes, it was suspended last March following a jihadist attack in the northeast of the country. This led French flagship TotalEnergies to put its 16.5 billion euro project on hold. Now the area seems safer, and favourable to the resumption of economic activities. During a press conference last week, the Minister of Mineral Resources and Energy, Carlos Zacarias, did not fail to recall his wish for operations to resume quickly because “the security situation in the area where the TotalEnergies and ExxonMobil projects will be implemented has improved a lot”. In an interview in Maputo, Antonio Sánchez-Benedito Gaspar said that “Mozambique’s gas, with the presence of large European multinationals, now has an even greater and more strategic value”.
Mozambique also wishes to harness this natural resource for further economic and social development and is very open to this new partnership between the country and the EU. Mozambique’s state-owned National Hydrocarbon Company (ENH) has expressed its willingness to help the EU ‘especially because of the uncertainty of Russian supplies following the invasion of Ukraine’, said its head.
To address the EU’s energy deficit, Mozambique is considering launching the construction of a second floating platform based on the existing one. However, this project is a medium-term vision, as the construction time is estimated at three years. Nevertheless, with the progressive exploitation of natural gas in the region, Mozambique could be an important African energy partner for the EU within a few years. A publication on African markets states that “there is no doubt that there is great potential in Africa to supply gas to Europe. However, it is very limited in the short term, mainly because gas projects take time to materialise, but in the medium, to long term, it is possible that Africa, especially Mozambique, could meet all of Europe’s gas needs”
The only obstacle to the start of work is the security factor, which has not yet been fully resolved, but when it is, the project should create 5,000 jobs for Mozambicans – during the construction phase – and another 1,200 in the operational phase, as well as the mobilisation of 2,500 technicians for the development of the training plan. Minister Zacarias also pointed out that these construction projects are a boost to employment: “These projects also have a great capacity to create indirect jobs, as foreign labour decreases throughout the project and Mozambican labour increases. Most of these jobs are expected to be provided by contractors and subcontractors,” he said.
In addition, in order to meet the demand for skilled labour for extractive industry projects in the country, the director of the National Petroleum Institute (INP) envisages the development of a human resources framework that is able to meet market demands in order to address the gap between investment in the industry and its capacity to create jobs.
The stabilisation of long-term security in the north of the country is now the key to unlocking the country’s economic activities and initiating a possible cooperation project between Mozambique and the EU.