The African Energy Chamber has highlighted the importance of peace and stability in the region as Mozambique plans to develop its significant LNG resources.

What: With its extensive offshore gas reserves, Mozambique is emerging as one of Africa’s most vibrant gas markets.

Why: Since the discovery of substantial natural gas reserves off Mozambique’s northern coast in 2010, the country’s economic outlook has significantly brightened.

What next: The AEC urges the Mozambican government and opposition to prioritise balance and uphold the country’s post-colonial and post-war stability to ensure its prosperity, social progress, and economic growth.

The African Energy Chamber (AEC) has emphasised the need for peace and stability in the region as Mozambique, where political unrest has soared as the country approaches the January 15 inauguration of President-elect Daniel Chapo and a refugee crisis, prepares to harness its vast liquefied natural gas (LNG) potential.

Since the discovery of substantial natural gas reserves off Mozambique’s northern coast in 2010, the country’s economic outlook has significantly brightened. An IMF report projected $500bn in total revenue by 2045 and an average real GDP growth rate of 24% from LNG exports between 2021 and 2025. Leading energy companies, including supermajors TotalEnergies (France), ExxonMobil (US), and Eni (Italy), are advancing integrated LNG projects, while new upstream players enter the market and pursue gas-to-power initiatives.

“Projects like Coral Sul LNG, the Rovuma LNG facility and the Temane Gas-to-Power Plant have the potential to draw in billions of dollars in investment and revenue while providing stable energy to upwards of 2 million families by 2030,” the AEC said in a press release on December 27.

These advancements are a significant win not only for international investors but also for Mozambique itself. With its extensive offshore gas reserves, the country is emerging as one of Africa's most vibrant gas markets. According to the AEC, Mozambique has the potential to rank among the top ten global producers and could account for up to 20% of Africa's gas production by 204.

However, regional stability remains central to international players working in Mozambique, who rely on peace and security to continue their projects. Japan’s Mitsui is currently working with TotalEnergies and Mozambique’s government to resume construction of a $20bn LNG project in the country.

Operations to restart

The project in northern Mozambique was abandoned in early 2021 after Islamist insurgents operating in the area since 2017 invaded a nearby town. Since then, TotalEnergies, the operator in the 13mn tonne per year (tpy) project, and its partners, including Mitsui, have been in talks with authorities on the security in the region, as recently reported by NewsBase.

The Islamist rebellion, which displaced up to 1mn civilians at its peak in mid-2021 and has resulted in more than 4,500 deaths, has been easing in recent months with some civilians returning to their former homes.

According to Mitsui CEO Kenichi Hori, the unrest is waning, encouraging the partnership to consider restarting work. “We are working closely with the operator Total and the Mozambique government to ensure security and finalise preparations for resuming construction,” Reuters quoted Hori as telling investors.

“Several key checkpoints remain, but we are now in the final stages of preparation to restart construction as soon as possible.”

Mozambique has up to 181 trillion cubic feet (5.13 trillion cubic metres) of recoverable gas, most of it off its eastern Indian Ocean coast. Other majors with gas assets there include Eni and ExxonMobil. The former’s project, which is wholly offshore, is already producing LNG for export while the latter is expected to take the final investment decision (FID) soon, according to reports.

Hori, noting the project’s high-quality gas, substantial reserves and strong competitiveness, said the company would move forward while “carefully” managing local risks. Furthermore, in October 2024, TotalEnergies CEO Patrick Pouyanne said financiers reconfirmed 70 - 80% of a $14bn financing package for the project.

Mozambique’s appeal

Mozambique’s central location and resource wealth position it as a critical player in the southern African energy landscape, enabling it to influence regional energy policies and collaboration efforts. The country’s vast natural gas reserves can provide a stable energy supply to neighbouring countries like Zimbabwe, Tanzania, Zambia, Malawi, Eswatini, and South Africa, reducing their reliance on coal and imported fuels.

Additionally, Mozambique’s 2,700-kilometre coastline along the Indian Ocean places it as a strategic gateway for maritime traffic across the longitudinal hemisphere. This advantage enables the country to participate in efficient global energy production while expanding access to affordable, high-quality goods from key markets in Asia, India, Europe, and the Americas.

For Mozambique to fully unlock its immense potential, maintaining political stability and prioritising sustainable development are essential. The AEC believes that a peaceful and stable environment is crucial for fostering long-term international partnerships, enabling the country to transform its vast natural resource wealth into widespread benefits for its people.

Future potential

According to the AEC, Mozambique’s progress toward becoming a top energy producer depends on its ability to promote unity, ensure security, and uphold democratic values. A steadfast commitment to peace will not only attract international investors but also empower the nation to drive inclusive prosperity for its citizens and solidify its position as a vital player in Africa’s energy landscape.

“Peace and stability are essential for Mozambique to unlock its vast economic potential. As the country emerges as a global energy hub, the international community’s confidence hinges on a secure, unified nation,” AEC executive chairman NJ Ayuk said.

“A commitment to peace will not only ensure the success of multi-billion-dollar energy projects but also secure long-term prosperity, driving sustainable growth for Mozambique and the entire southern African region. To do this, the government must find common ground and reach terms that translate to long-term beneficiation for the entire population of the country,”

The AEC believes that Mozambique faces a pivotal moment where one direction risks prolonged instability, while the other offers the opportunity to establish the country as a reliable partner in the global energy sector. Therefore, the chamber urges the Mozambican government and opposition to prioritise balance and uphold the country’s post-colonial and post-war stability to ensure its prosperity, social progress, and economic growth.