Samsung Delivers $2.5B FLNG Plant for Mozambique's Coral South Field
Mozambique is hoping to inject new life into its beleaguered liquefied natural gas (LNG) sector after Samsung Heavy Industries (SHI) completed the construction of a floating LNG facility (FLNG) for the offshore Coral South project.
With onshore LNG projects in limbo due to insurgency, the country is banking on an offshore project implemented by Italian company ENI and Korea Gas Corp (KOGAS) to develop its vast LNG resources.
On Monday, South Korea President Moon Jae-in and his Mozambican counterpart President Filipe Jacinto Nyusi attended the christening ceremony of the FLNG facility at SHI’s shipyard in Geoje Island. Following the christening, the facility will be delivered to Mozambique, and gas production anticipated to commence next year.
The $2.5 billion Coral-Sul FLNG is a floating liquefaction plant with a capacity of 3.4 million tonnes per annum. It will develop the resources of the Coral gas field in Mozambique's Rovuma Basin, which is estimated to hold approximately 16 trillion cubic feet of gas.
KOGAS controls a 10 percent stake in the Coral gas field and has invested $513 million in the floating LNG facility. It is also guaranteeing up to $640 million of the project’s debt financing.
Mozambique is home to about 150 trillion cubic feet of proven natural gas reserves, but militancy along its northern border has made development difficult. Two shore-based projects, the $20 billion Mozambique LNG project led by TotalEnergies and the $30 billion Rovuma project led by ExxonMobil, are facing an uncertain future due to an Islamist insurgency in the country's northeastern Cabo Delgado region. TotalEnergies declared force majeure for its LNG plant project in April, and rumors have circulated that ExxonMobil may be reviewing its own plans.
By contrast, the entire plant for Eni's Coral South FLNG project will be located about 20 nm offshore, ensuring that it will not be possible for insurgents to march on the facility en masse - as they did at the Mozambican ports of Palma and Mocimboa da Praia this past year.
The International Monetary Fund believes that LNG can be a game changer for the country’s economic transformation. Mozambique has the potential to generate $12 billion annually by exporting 30 million tonnes of LNG - if it manages to bring all the three projects on stream.