UK-based GL Africa Energy said it has finalized a concession agreement with the government of Mozambique to finance and operate a 250 MW LNG power plant in the northern part of the country.
Under the deal, GL Africa Energy, a part of Janus Continental Group, said it would build the $400 million LNG power plant in Mozambique’s Nampula province.
According to the firm, the first phase includes an investment of $90 million for about 50 MW capacity. It expects to complete this phase within 16 months.
In addition, the second and third phases would add 200 MW of capacity and GL Africa Energy expects to finalize these phases within 24 months.
GL Africa Energy did not reveal any additional information on the LNG part of the project, but it said it would get gas from the giant Rovuma Basin offshore Mozambique.
Largest investment to date
The deal represents GL Africa Energy’s largest investment to date, adding to its existing operations in eight countries across the Great Lakes but also southern Africa regions.
As part of the 30-year public-private partnership, Mozambique’s state electricity firm Mozambique Electricity (EDM) will hold the initial public interest of the project.
Also, EDM would be the principal buyer of the power the project generates, while excess supply would go to other southern African countries, GL Africa Energy said.
Domestically, the plant would bring electricity to over half a million people, it said.
Its LNG solution provides an “almost instant bridge fuel” throughout the next two decades, reducing reliance on more polluting HFO, diesel, and coal, the firm said.
LNG export projects in Mozambique
Gas fields within the Rovum Basin will provide fuel for at least two large LNG export projects currently under construction in Mozambique.
The Coral South FLNG project led by Italy’s Eni will get gas from the Coral gas field in the Area 4 of the Rovuma Basin. This 3.4 mtpa floating LNG project should start in 2022.
ExxonMobil, which is a partner in the Coral South FLNG project, is also planning the 15.2 mtpa Rovuma LNG plant, but the firm has still not taken a final investment decision on this facility.
On the other side, France’s TotalEnergies declared force majeure on its $20 billion Mozambique LNG project earlier this year following new attacks near the Afungi plant site.
This project includes the development of offshore gas fields in Mozambique’s Area 1 located within the Rovuma Basin and a 12.8 mtpa liquefaction plant at the Afungi complex.