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

By Matthew Hill and Borges Nhamire on 10/8/2019

MAPUTO (Bloomberg) -- Exxon Mobil Corp. awarded a JGC Corp.-led group a contract to develop its Mozambique liquefied natural-gas project, which is set to be the biggest-ever private investment in Africa.

Japanese company JGC will be joined by Fluor Corp. and TechnipFMC Plc to develop the Rovuma LNG project, Exxon Senior Vice President for LNG Peter Clarke said in a speech Tuesday in the Mozambican capital, Maputo. The facility will cost between $27 billion and $33 billion, according to March estimates by Johannesburg-based Standard Bank Group Ltd.

Preliminary activities costing about $500 million will start soon, according to Clarke.

A final investment decision is expected next year, and production will probably start in 2025, Clarke said. The government approved sales and purchase agreements for the gas, Exxon said, adding it has adequate buying commitments to enable the project to close financing.

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

Exxon’s announcement comes before the southeast African nation holds a vote 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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