Oil report

Britain's GL Africa Energy to build $400 mln LNG power plant in Mozambique

JOHANNESBURG, Nov 4 (Reuters) - British firm GL Africa Energy signed a deal on Thursday with Mozambique’s government to finance, build and operate a $400 million, 250 megawatt liquefied natural gas (LNG) power plant in the north of the country, the company said.

The agreement will see GL Africa Energy, which invests in energy projects in southern Africa and the Great Lakes, build the plant in Mozambique’s Nampula province, which will use gas from a massive field discovered further north off Mozambique’s coast.

It will mark the firm’s biggest investment to date and bring power to over half a million people under a 30-year public-private partnership, according to GL Africa Energy’s statement.

“It is an historic milestone for the region,” said Mamadou Goumble, chief executive of the energy business of Janus Continental Group, a holding company that owns GL Africa Energy, adding it will change the lives and fortunes of many Mozambicans.

The public interest in the project will be held by Mozambique’s state electricity firm Mozambique Electricity (EDM), which will be the principal buyer of the power it generates. Excess supply will be exported to other southern African countries.

Mozambique’s Rovuma Basin represented one of the largest untapped gas reserves on the planet when it was discovered, attracting the interest of some of the world’s biggest energy companies. TotalEnergies, Exxon Mobil and Eni are today all developing or operating projects there worth some $60 billion combined.

While some see the find as critical to transforming the economy and development of Mozambique, one of the world’s least developed nations, environmental campaigners say LNG projects, while cleaner than other fossil fuels, still lock in harmful emissions for decades that put such countries at greater risk of catastrophic weather.

An insurgency linked to Islamic State has also sprung up on the gas projects’ doorstep, bringing TotalEnergies’ $20 billion project to a grinding halt and helping delay a final decision from Exxon on whether to invest there. (Reporting by Emma Rumney Editing by Mark Potter)