Mozambique's soaring success in Renewable energy and Oil & Gas

DSV Air & Sea Mozambique has been operating for more than 30 years in the country, and services its clients from its headquarters in Maputo with support offices in Temane, Beira, Nacala and Pemba, site offices in Vilanculos and Tete, and border offices in Ressano Garcia and Machipanda.

According to the World Bank, Mozambique’s medium-term economic outlook “is positive, with growth expected to accelerate to 6% over 2023-2025, driven by continued recovery in services, increased liquefied natural gas production (LNG), and high commodity prices. However, downside risks linked to climate shocks, security risks, and food and fuel price pressures could lower medium-term gross domestic product (GDP) growth to 4.5%.”

DSV Mozambique managing director, Philipp Buechler, said the company had benefited from the country’s growth in renewable energy and oil and gas.

“In terms of renewable energy, we have just finished with the Cuamba 18 MW Hybrid Solar Power Plant project for Globeleq, a leading independent power producer. The project has run for more than 18 months”, he said.

DSV has a long-standing relationship with Sasol and the Temane Thermal Power Station, a major $2 billion, 450 megawatts (600,000 hp) natural gas power plant being developed by a consortium comprising Globeleq and eleQtra (UK), the Mozambique government-owned electric utility company Electricidade de Mocambique (EDM), and Sasol (SA). The project consists of the 450MW Central Termica de Temane (CTT) power plant and the associated 563km long Temane transmission project (TTP).

“Sasol has started a new drilling campaign which will support the construction of a gas power plant which is under construction right now, and the extension of the LG plant they have on site. So, it’s a complete new liquified gas plant they are building, and it keeps us busy with a lot of out of gauge shipments, breakbulk shipments, emergency cargo and so on”, said Buechler.

DSV has also been kept busy at Pemba, a port town and the capital of Cabo Delgado Province on the northeastern coast, through the Eni Coral South, an offshore gas field project.

Eni is a global energy company, and the Coral field feeds the Coral Sul FLNG ship which has an estimated reserve of about 500 billion cubic metres of natural gas. Together, the Coral, Mamba and Agulha reserve contains an estimated 2.4 trillion cubic metres of gas. The gas, distributed as LNG, is expected to be a significant contributor to Mozambique’s development.

Looking ahead, there is the renewable sector project, a windmill park project, and Buechler said there is also movement towards restoring operations at the Afungi site in the north of the Cabo Delgado province.

Total withdrew all Mozambique LNG project personnel from the Afungi site in 2021 when it declared a force majeure.

“There is an intention to lift this year the force majeure and it looks like we will have a restart of the project mid next year. Obviously a lot needs to happen still and the consortium needs to go out into the market and reprice the entire logistics “monster” which has more bottlenecks than ever before. And we have another rainy season coming now so it’s going to get worse”, he said.

But Buechler points out there is pressure to get the project back on track because it’s important for the country’s economy.

“There are four or five logistics companies with the right capacity to work and a challenge is new players who pop up with ridiculous prices and little capacity or knowledge.  But the ones who have survived the last ten years will get a fair piece of the pie. And if the Total project comes off next year there will be work for everybody.”

Aside from oil and gas, there is the Cahora Bassa North hydro power project planned for the Zambezi River / basin in Tete. This greenfield project is expected to be commence in 2025.

In the Fast-Moving Consumer Goods (FMCG) sector DSV has signed with a global beverage company to provide a cross dock solution of 12 000 sq m.

And Buechler is hopeful that Zimbabwe-Mozambique corridor will see activity accelerate, particularly since the elections in Zimbabwe have been held.

DSV is planning a workshop for later in the year, along with Standard Bank and key role players from the oil and gas sector. The idea is to come together to help resolve challenges around bottlenecks in the north, logistics challenges, customs, exemptions processes, pricing, greenfield opportunities.

Buechler remains optimistic about Mozambique’s future and is comfortable with DSV’s spread across different sectors, specifically oil and gas, renewables, and project cargo.