Spin-off effects from Mozambique gas to illuminate SA’s energy future

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Marked as the largest gas discovery in Africa’s history at 187 TCF, Mozambique is taking important steps toward its transformation – after previously being ranked amongst the poorest countries in the world.

Those steps include three planned LNG plants that could eventually see Mozambique becoming the world’s fourth largest producer of liquefied natural gas (LNG).

And, while the political landscape may pose a risk – international investors still show remarkable interest in the region.

Funders that are actually coming into these projects are not just local or regional banks, but they’re big international commercial banks… all showing interest.

Bhavtik Vallabhjee, Head: Power, Utilities and Infrastructure, Absa Corporate and Investment Banking

This will give rise to new industries outside of power generation and, is predicted to bring forth potential for industrialisation – creating jobs, factories and an opportunity to revitalise the African economy following the crippling effects of Africa’s energy struggles.

The spin-off effects from latching onto that gas are going to be huge for the region and, that's going to result in stability for the region.

Bhavtik Vallabhjee, Head: Power, Utilities and Infrastructure, Absa Corporate and Investment Banking

The spin-off effects for South Africa present business opportunities to the total of at least $500m, according to Business Day.

Furthermore, the opportunities brought by the gas discoveries could double Mozambique’s GDP and, put it on the radar of world markets.

The recent approval of $23 billion foreign investment from Anadarko Petroleum could make emerging LNG leader, Mozambique the largest producer and exporter of gas in the whole of Africa.

They already have a staggering GDP per capita at the moment… and this is going to culminate regional stability with a returning diaspora who would want to remain in their home country where a larger number of jobs would become available due to the spin-off downstream industries that would arise such as: urea and fertilizer plants, cracker plants, gas-fired power generation and possibly gas pipelines – not to mention the burgeoning upstream O&G sector.

Bhavtik Vallabhjee, Head: Power, Utilities and Infrastructure, Absa Corporate and Investment Banking

For more detail, watch the video below. Bhavtik Vallabhjee (Head: Power, Utilities and Infrastructure, Absa Corporate and Investment Banking) in discussion with Colin King (Principal: Resource and Project Finance, Absa Corporate and Investment Banking) about the development of South Africa’s renewable energy rescue plan and, the business opportunities that rest at the doorstep of Mozambique’s gas industry.