Mozambique - Country Commercial Guide
Oil & Gas

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-03-10


Over the coming decade Mozambique is expected to become a major liquified natural gas (LNG) exporter due to the discovery of over 180 TCF of natural gas reserves in the Rovuma basin in the north of the country.  These discoveries are spread over two concessions. The first is AREA1 led by Total S.A.  which plans to build up to six LNG plants. The first two plants reached final investment decision (FID) in 2019 valued at $23 billion. Total selected a joint venture of contractors led by Saipem and McDermott to construct the facilities, including dedicated airstrip and port facilities located in the Afungi LNG Park. This project is expected to come into production in 2024 with exports destined for Asian and European markets as well as over 400 MMCF reserved for domestic uses.

The second concession named AREA4 is co-led by ENI and ExxonMobil, where ENI will lead all upstream operations, and ExxonMobil will lead the construction and operation of LNG facilities onshore located in the Afungi LNG Park. In 2017, ENI announced the FID for $8 billion for the construction of six subsea wells connected to a Floating Liquified Natural Gas (FLNG) production facility due for completion in 2022.  The Engineering Procurement and Construction (EPC) contract was awarded to a consortium composed of TechnipFMC, JGC and Samsung Heavy Industries. AREA4 is also developing two onshore LNG trains, but the timeline for an FID remains uncertain.

Mozambique’s current natural gas production is operated by Sasol (South Africa) in Inhambane Province, which holds proven reserves of 2.6 trillion cubic feet (TCF).  The natural gas is produced and processed at a central facility in Temane and then exported via an 865 km pipeline to South Africa, with a link to southern Mozambique for domestic use.  Additionally, Sasol is developing an integrated oil and liquefied petroleum gas project adjacent to its existing petroleum facility.  The project includes 13 wells and an LPG production facility at an estimated cost of $1.4 billion.


All exploration concessions are assigned by the National Petroleum Institute (INP) through public tenders. Production contracts can then be negotiated once petroleum reserves are discovered.

In 2018, INP has signed concession contract for petroleum exploration and production in offshore blocks in the Angoche and Zambezi Basins and onshore blocks in the Mozambique Basin to four consortiums led by ExxonMobil, Sasol, ENI, and Buzi.  As of June 2020, none of these operators had started exploration or production activities in these blocks.

Domestic Gas and Local Content

Empresa Nacional de Hidrocarbonetos (ENH), the state-owned hydrocarbon company, represents the Mozambican Government in petroleum operations.  The law stipulates that ENH participate as a stakeholder in petroleum production operations, as well as exploration projects. ENH is also engaged in other national flagship projects, such as the oil and gas terminal expansion in the Port of Pemba, and the urbanization of the district of Palma, where the Area 1 and 4 natural gas business activities will be concentrated.  In partnership with the Korean gas company Kogas, ENH is also operating a gas distribution network to provide households and industry with piped gas in the south of Mozambique.

The Government of Mozambique has determined that a portion of natural gas production should be used locally to address the needs of the domestic market, the National Petroleum Institute (INP) organizes tenders to identify companies interested in developing industrial projects.  In 2016, Norway’s Yara International was granted an allocation of 80-90 mcf/d of gas to produce 1.2-1.3m t/yr of fertilizers.  Additionally, Royal Dutch Shell won the concession for a Gas to Liquid (GTL) plant producing 38mb/d of liquid fuels such as diesel, naphtha, and kerosene. Unfortunately, both of those companies have abandoned their concessions. Finally, a Kenyan group, GLA, was awarded a concession to build a 250MW power plant.  There is uncertainty as to whether the off take to which the government is entitled will be sufficient to provide natural gas to all three projects during the first phase of operations.

Leading Sub-Sectors

  • Engineering and steel structure fabrication services
  • Oil & gas machinery and services
  • Oil & gas drilling machinery and equipment
  • Maritime security equipment and services
  • Safety and security equipment and services


For the next five years, opportunities for U.S. equipment suppliers will be driven by the construction of Total’s LNG plant, ENI’s FLNG plant, and ExxonMobil’s LNG plant.  The LNG development plan includes two 180,000 cubic meter LNG storage tanks, condensate storage, a multi-berth marine jetty, and associated utilities and infrastructure.  ENI’s development plan foresees the drilling and completion of six subsea wells in addition to the construction and installation of an advanced technology FLNG with a future onshore liquefaction facility.  ExxonMobil’s development plan includes the construction of two liquefied natural gas trains which will each have the capacity to produce 7.6 million tons of LNG per year and related facilities. All three of the these project have an onshore base in the Afungi Park, hosting all the supporting infrastructure including accommodation facilities, port and airport infrastructure, as well as specialized tax and work visa regime.