KPMG Africa: East Africa’s natural gas boom – where are we now?

As of 2013, East Africa’s proven natural gas reserves were meagre, while production and exports were all but negligible. Tanzania and Mozambique are the only gas producing countries in the region. However, the region holds massive potential: estimates of possible gas reserves off the coast of East and South-Eastern Africa are in the region of 12.5 trillion m3, according to the USGS.

There have been numerous gas finds in Mozambique and Tanzania since 2010. In fact, finds in the Rovuma Basin have provided the operators of the gas projects enough incentive to develop LNG facilities in both countries. The gas sector’s potential is attracting large-scale investment to the region and is providing a boost to the respective economies. Gas strikes off East Africa’s seaboard have led to predictions that the region could become the world’s third-largest exporter of natural gas over the long term. 

Mozambique’s gas prospects

The two main international oil companies involved in exploration in Mozambique are Anadarko and Eni. Offshore drilling by Anadarko and its joint partners exploring this region has led to the discovery of an estimated one trillion m3 – 1.8 trillion m3 of recoverable natural gas. The other main international oil company involved in exploration in Mozambique, Eni, has also made large discoveries, with reserves at Mamba, Coral and Agulha combined estimated at 2.4 trillion m3.

With new discoveries continually being made, Mozambique could become a gas giant in Africa. A number of LNG trains are set to be built in the medium to long run to commercialise the country’s gas deposits. Four LNG trains with a combined capacity of 27 billion m3 p.a. are expected to be completed by 2020 with another few trains set to be built by the mid-2020s. MORE