Mozambique's proposed Rovuma liquefied natural gas (LNG) project, led by ExxonMobil (NYSE: XOM), could add about $11bn a year to the country's economy, generate $4bn in annual tax revenues and create tens of thousands of jobs once production begins, according to a new study.
The study, commissioned by Standard Bank and prepared by Conningarth Economists, estimates the project could become a major driver of economic growth as Mozambique develops its vast offshore natural gas resources, Bloomberg reported.
Standard Bank Mozambique Chief Executive Bernardo Aparício said the fiscal benefits would extend well beyond the energy sector. 'Tax revenues will play a key role in reducing sovereign debt and strengthening public investment, while also driving economic growth,' he said in a statement.
The report projects that the Rovuma LNG project, which is expected to begin production in 2030, could lift Mozambique's annual economic growth rate to 4.1% and contribute $81bn to the country's sovereign wealth fund by 2056. It also forecasts household incomes could rise by 21% and says the development could position Mozambique among the world's four largest LNG exporters.
ExxonMobil and its partners approved the Rovuma LNG project in principle before delaying development as Islamist insurgency intensified in Cabo Delgado province and global energy market conditions deteriorated. The company has since indicated it intends to move the project forward as security conditions improve.
Mozambique is seeking to unlock more than 100 trillion cubic feet of recoverable offshore natural gas (approximately 2.8 trillion cubic metres) through several multibillion-dollar developments in the Rovuma Basin.
Besides the Exxon-led Rovuma LNG project, TotalEnergies (EPA/LSE/NYSE: TTE) is working towards restarting its $20bn Mozambique LNG project after a four-year suspension caused by the insurgency, while Eni (BIT: ENI; NYSE: E) is advancing plans for the $7.2bn Coral North floating LNG project following the successful start-up of the Coral South FLNG development in 2022.
Rwandan troops and regional forces from the Southern African Development Community have helped improve security in parts of Cabo Delgado, allowing energy companies gradually to resume preparations for delayed investments, although the insurgency has not been fully defeated.
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