The USD60 Billion liquefied natural gas (LNG) projects is under threat and risk in Mozambique northern province Cabo Delgado due to long standing conflicts between the Mozambique government and Islamist insurgence.
Some observers recently predicted that Mozambique could have become one of the liquefied natural gas (LNG) but this is all in vain as the violence escalates from day to day.
The conflict has put a temporary lid on plans that have been in the making for more than a decade since rich liquefied natural gas (LNG) deposits were discovered in the Rovuma Basin, just off the coast of Cabo Delgado.
The development of the projects had led to the area becoming a hive of economic activity with a proposed plans to make Palma to become a liquefied natural gas (LNG) manufacturing hub where hundreds of skilled workers would be located.
The offshore exploration in the Cabo Delgado area includes the Mozambique LNG Project (involving Total and previously Anadarko) worth USD20Billon the Coral FLNG Project (involving Eni and Exxon Mobil) USD4.7 and the Rovuma LNG Project (involving Exxon Mobil, Eni and CNPC) USD30 Billion
Observers said that Mozambique liquefied natural gas (LNG) projects will miss the production schedule to start in 2024 due to intensifying attacks near the gas site on the Afungi peninsula are now posing serious challenges to the production time lines.
There have been no material benefits for the people of Cabo Delgado thus far. Moreover, many local people feel deeply aggrieved because many we’re losing land due to relocation.
Western majors like Total, Exxon Mobil, Chevron and BP entered the Mozambique LNG industry as well as Japan’s Mitsui, Malaysia’s Petronas and China’s CNPC
The escalation of the insurgency can potentially jeopardise the successful unlocking of Mozambique’s resource wealth.
Until now, the main liquefied natural gas (LNG) installations and sites have not been targeted, but the attacks in Palma have brought the turbulence dangerously close to some of the installations.
The Mozambican armed forces are clearly stretched beyond the point where they can protect the local communities.
A part of the solution lies in Southern African Development Community or at least South African military support to stabilise Cabo Delgado and restore law and order in the short term. Wider international support might even be necessary.
But this would require the Mozambican government to change its stance by allowing multinational foreign military forces on its soil and drive out the terrorist group.
At the same time, a long term solution should be pursued. This will require better governance of the northern areas and the local people.
It is clear that Cabo Delgado is an area which the central government in Maputo is unable to control, govern effectively, or even influence parts.
Recent events in Palma, a town in the volatile Cabo Delgado province in the north of Mozambique, have taken bloodshed in the region to new levels. Dozens of people were killed in cold blood on 25 March 2021, shops, banks and military barracks were on target.
Cabo Delgado is Mozambique’s most Northern Province. Neglected over many years, the people who live there have been politically marginalised. And the area is underdeveloped.
Since independence in 1975 investment, and rising incomes, were largely confined to the capital Maputo in the south as well as the southern parts of the country.