Mozambique has discovered a large amount of natural gas in its offshore basins, and recent developments have made this East African country a major natural gas competitor in the world. The country’s proven natural gas reserves are about 100 trillion cubic feet, and large-scale natural gas processing infrastructure is under construction. By ensuring a viable supply of liquefied natural gas (LNG), the country has the potential to meet the energy needs of the entire region. Therefore, the proposed African Renaissance Pipeline (ARP) project aims to connect Mozambique’s emerging LNG supply with the wider region’s growing supply by establishing a cross-border land gas pipeline from the Rovuma Basin in Mozambique to Houten Springs, South Africa. Need to connect.

The African Renaissance Pipeline was established by a joint venture agreement between a private consortium and the Mozambique National Oil and Gas Company; the private consortium includes: Profin Consulting Sociedade Anónima; South Africa’s Sako Petroleum Holding Co., Ltd.; China International Pipeline Construction Corporation, China Petroleum Pipeline Bureau.

Africa Renaissance Pipeline

The African Renaissance Pipeline has an annual production capacity of 18 billion cubic meters (equivalent to 13.2 million tons of LNG) and will span 2,600 kilometers, including 2,175 kilometers through the eight provinces of Mozambique and 425 kilometers through the two provinces of South Africa. The pipeline is scheduled to be completed in the Mozambique section in 2025, and the South African part is completed in 2026. It will connect the gas field in the Ruvuma Basin in northern Mozambique with South Africa. Additional acquisition points along the branch line to the main towns and pipelines of Mozambique and along the extension of Eswatini,

The raw materials for the African Renaissance Pipeline are located in the Rovuma and Mozambique Basins. The annual production capacity of the African Renaissance Pipeline is estimated to be 18 billion cubic meters. New discoveries may also be made in the onshore and offshore blocks currently being explored in the Mozambique Basin. The total project cost of the Africa Renaissance Pipeline Project is estimated at 7.98 billion US dollars, of which a debt/equity ratio of 70:30 will promote the development of the project.

The proposed African Renaissance Pipeline project will serve the entire natural gas value chain and provide opportunities for direct energy (including commercial, industrial and household power generation) natural gas, which is used in conversion processes and transportation fuels.

In November 2020, the project developer applied to the Mozambican government for a concession to build, own and operate the infrastructure system of the African Renaissance Pipeline Project. The application is still under consideration.

The African Renaissance Pipeline Project is considered a viable investment project and is expected to bring substantial returns to investors. More importantly, this pipeline has the potential to leverage approximately US$63 billion in upstream and downstream petrochemical industries, related investments and multipliers. In terms of return on investment, the ARP project stands out for its guarantee of export diversification and protection against external shocks typical of the global LNG trade.Editor/Huang Lijun