Some of the world’s biggest shipowners are lining up to move natural gas from Mozambique as French energy giant
moves ahead with its $23 billion East Africa liquefaction project.
People with knowledge of the matter said the project will involve use of at least 16 new liquefied natural gas carriers worth around $2.9 billion, that will be backed by multiyear charters.
Mitsui OSK Lines Ltd.
are set to sign contracts as soon as this month to add four vessels each and Maran Gas Maritime Inc., owned by Greek shipping magnate John Angelicoussis, will build another four.
The vessels, costing an average of $190 million each, are to be built by South Korea’s
The project provides a boost to a once-booming natural gas market that has foundered in recent months under sagging demand as lockdowns triggered by the coronavirus response have hurt industrial activity. Some projects, including
investment in a Port Arthur, Texas, LNG export terminal, have been pushed back.
The postponement also delayed a decision by Middle East energy giant Saudi Aramco on potential contracts for a dozen LNG carriers worth around $25 billion. Under a 20-year deal signed last year, Aramco would buy a 25% stake in the Sempra facility and move five million metric tons of natural gas annually.
Three people involved in Total’s Mozambique project said there have been fears that the French energy major would postpone scheduled work by at least a year because of the global economic downturn and growing attacks by militant Islamic groups in the country.
“There have been complications, but the Total project is moving ahead,” one person said. “The chartering contracts for the LNG carriers are also moving ahead.”
The project has been in the works for years under different owners. Total now controls a 26.5% slice, local energy firm Mitsui E&P Mozambique Area 1 holds 20% and the rest is split among other investors.
It is supposed to produce 13 million metric tons of gas a year after it is completed in 2023, with European and Asian buyers targeted for much of the output.
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Read More: Shipowners Line up for Total’s Mozambique LNG Project