* Agencies rate Mozambique credit as highly speculative
* Country faces developed LNG competitors with top ratings
* Australia, N.America, E.Africa all want to sell to Asia
By Henning Gloystein
MAPUTO, March 28 Mozambique may struggle to find
all the investment finance it needs for its ambitious liquefied
natural gas (LNG) projects as it must compete with top-rated
developed economies with similar big LNG export plans, regional
energy and finance experts said.
Some of the world's biggest offshore natural gas fields lie
off Mozambique, which despite recent coal and gas discoveries
remains among the least developed nations on the planet.
Lacking the capital to develop multi-billion dollar LNG
export terminals by itself, Mozambique must attract foreign
investment for financing. To encourage this investment, the
government is planning to introduce new energy and mining laws
that will set a clear regulatory and taxation environment.
"The oil and gas law is currently at the parliament. The
parliament is going to approve the bill in its next session," s
Minister of Natural Resources Esperanca Bias told Reuters. She
said the law would be approved within months.
Italy's Eni and U.S. company Anadarko are
among major investors who are aiming to launch LNG exports from
Mozambique in 2018.
But experts say Mozambique may have trouble finding all the
financing it needs to expand its promising energy sector as
other potential LNG exporters offer a less risky environment.
Mozambique is holding an election in October to elect a
successor to President Armando Guebuza, who has served two terms
and cannot stand again. Small-scale attacks over the last year
by armed partisans of the Renamo opposition movement, the former
enemy of Guebuza's Frelimo party in a 1975-1992 civil war, have
raised some concerns about long-term security.
CHALLENGE RAISING CASH
"Mozambique's credit rating is substantially below
investment grade, and it may face trouble finding the necessary
cash in an environment in which several countries are vying for
investment to begin gas exports," said Paul Eardley-Taylor, head
of oil and gas for Southern Africa at Standard Bank, during an
energy conference in Mozambique's capital Maputo this week.
"Canada, the United States and Australia, which are all
introducing LNG export facilities or planning to build them,
have much better ratings and this means they will find it easier
than Mozambique to attract the necessary capital."
Leading rating agencies Standard & Poors, Fitch, and Moody's
all class Mozambique's credit rating as highly speculative.
The southeast African nation, which is still trying to
rebuild more than two decades after the end of its devastating
civil war, will face tough competition from other gas producers
all wanting to sell to the same Asian markets.
"Australia, North America and East Africa all want to sell
their LNG to Asia. There will be more gas than needed, so those
who get to the market first and cheapest will win," said Ebbie
Haan, managing director of South Africa's Sasol Petroleum
Frank van Ginhoven, senior vice president at U.S.
engineering company Fluor, which is involved in Mozambique's LNG
development, warned too that major energy projects like LNG
terminals failed "at an alarming rate" due to labour accidents,
cost overruns and late deliveries.
Besides racing to beat LNG competitors, Mozambique is also
looking to gas exports to raise the government's revenues and
reduce a heavy dependency on donor aid which it has relied on
since independence from Portugal in 1975.
(Additional reporting by Manuel Mucari; Editing by Pascal