Mozambique And Tanzania Race To Be First To Export Gas To East Africa

Mozambique And Tanzania Race To Be First To Export Gas To East Africa

From Financial Post

Mozambique and Tanzania are locked in a race to be first to export gas from East Africa, but a bigger battle awaits as the United States and others gear up for a share of the global gas market.

Liquefied natural gas (LNG) shipments from huge recent discoveries could transform their struggling economies, where average annual incomes languish below $600 and life expectancy is less than 60 years.

As things stand today, natural gas is the fastest-growing fossil fuel and the market is tight, boding well for these would-be sellers.

Yet return on investment for the companies footing the hefty upfront costs will hinge on how fast they can reach market and how much gas is found as new rival LNG exporters come to market at the same time or sooner.

Those include Australia, which is off to a headstart, and a thriving U.S. energy market buoyed by shale gas which is expected to begin exporting gas from 2015.

Russia, the world leader in piped gas, has also set its sights on LNG, aiming to ramp up exports targeting Asia’s lucrative markets later this decade.

“Mozambique and Tanzania need to move fast to become major exporters,” shipping research group Lloyd’s List Intelligence said in a recent report.

“The clock is ticking for both nations, as global shale gas exports threaten to saturate the markets before either has had time to export any gas.”

The tasks they face include passing legislation to encourage and safeguard investors, securing investment for costly infrastructure, and allaying concerns about potential corruption.

Read more at Financial Post