Is there still a case for Matola LNG?

Higher LNG prices are good for producers and bad for consumers. Mozambique wants to be both

Good afternoon. Russia’s invasion of Ukraine has had knock-on effects around the world, including in Mozambique which has suffered inflation in food and energy prices, but whose gas resources have probably become even more valuable.

But Europe and the world’s dash for non-Russian gas could also have a detrimental effect on a major project planned for southern Mozambique: a regasification terminal to be installed in Matola, which would import LNG for use in Mozambique but mainly in neighbouring South Africa.

As LNG prices rise, however, the prospect of South Africa being able to afford to turn to LNG to meet its power needs, in particular, recedes. And if the country cannot afford LNG-to-power — whether the power is generated in South Africa or at a planned plant in Matola — the case for building an LNG import terminal shifts dramatically.

For an in-depth look at whether this potentially transformative project is ever going to happen, see below — in an article which is free to read (see below).

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Agenda:

• Today: President Nyusi attends inauguration ceremony of the Coral South FLNG project, in Pemba, Cabo Delgado

• Today: Two conferences on renewable energy are being held in Maputo:

  • ARENE opens its conference on off-grid regulatory frameworks

  • The African Guarantee Fund is hosting its 7th green finance conference

• Tomorrow: The Mozambican Ministry of Land and the Environment and the Institute for Multiparty Democracy hold a conference on resource sustainability and climate change resilience

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The latest from Zitamar News:

FREE TO READ: Is there still a case for Matola LNG?
The economics of the TotalEnergies-backed project in southern Mozambique have shifted, since Russia's invasion of Ukraine caused a spike in global demand for LNG

Cabo Ligado Weekly: 14-20 November 2022

• Insurgents ambush Tanzanian military convoy and assassinate Palma police chief

• Mozambique in the spotlight of the latest issue of IS newsletter Al Naba

• Zambia and Mozambique sign new defence cooperation agreement

Report also available in Portuguese

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Also in the news:

• Mozambican opposition prepares coalition to confront Frelimo

• Government tries to regulate the local militia

• Port of Mocímboa da Praia reopens

• IMF says Mozambique can survive without LNG, sees improvement in security

• Kenyan port holds up Mozambican maize cargo

• Tomaz Salomão steps down as Standard Bank chair

Today’s front pages in Maputo. Photo © Faizal Chauque / Zitamar News