A quarter of the Liquefied Natural Gas (LNG) produced in Mozambique will be made available to the national market for domestic consumption under a proposed revision of the Petroleum Law. With this move, the government aims to “fully” capitalize on the revenues generated by these operations.
The changes are detailed in the legislative revision proposal scheduled for parliamentary debate this Thursday. The government mandates that any petroleum development plan must include “a minimum quota of 25% of oil and gas, including in the form of produced LNG,” to be “allocated to the domestic market, exclusively for national consumption.”
The government admits that after 10 years of implementing the current legislation—and despite progress in attracting investment for significant petroleum projects—certain “gaps persist that require the strengthening of State sovereignty over resources and the capacity to fully capture revenues from petroleum operations.”
The justification for the bill emphasizes the urgent need to transform energy resources into engines for economic development, industrialization, and value chain generation for Mozambicans, aligned with global energy transition challenges.
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To “ensure a new dynamic that safeguards the State’s strategic interests,” the law establishes a binding agreement principle between petroleum operators and pre-existing right holders or affected local communities. This includes an obligation to submit periodic reports on human rights compliance.
Furthermore, the revision seeks to secure greater gains for the State through regulatory measures, such as obligations regarding natural gas flaring and the payment of fees by concessionaires who fail to develop project areas over long periods.
The amendments also aim to “drive industrialization through the allocation of LNG at competitive prices to the domestic market and the mandatory allocation of 100% of condensate to the domestic market.”
Additionally, the law introduces a mandatory minimum participation interest for the State’s exclusive representative and a “free carry” financing obligation until the start of commercial production, thereby reducing the State’s “effort and exposure to financial risks” in petroleum operations. This is intended to “strengthen national sovereignty and promote economic independence.”
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A notable highlight of the proposal is the reinforcement of the National Petroleum Institute’s role, granting it the status of a Regulatory Authority with sanctioning and inspection powers, as well as greater control over recoverable costs. A “hybrid regime” regarding “force majeure” is also established, providing predictability on deadlines and safeguarding the State from cost liabilities during project suspensions.
Mozambique currently has three approved development projects to exploit the Rovuma Basin natural gas reserves, which are ranked among the largest in the world. Eni’s Coral Sul project has been the only one in operation since 2022. Last October, an investment was approved for a second floating platform, Coral Norte—a 7.2 billion dollar investment expected to double production to 7 million tonnes per annum (mtpa) starting in 2028.
Following a four-year suspension due to terrorist attacks in Cabo Delgado, the TotalEnergies-operated Mozambique LNG project (Area 1) officially resumed in January, targeting 13 mtpa by 2029. It will be followed by ExxonMobil’s Rovuma LNG project (Area 4), a 30 billion dollar venture expected to produce 18 mtpa after 2030, with a final investment decision anticipated later this year.
