How South Africa can benefit from Mozambique’s LNG

South Africas problem is not that it is far away from LNG trade routes. It is – but transport cost is not really the killer issue. Way more serious is the political and societal landscape and the resulting inability of any institution in South Africa to come to decision point on big projects. Political correctness and affirmative action throw so many wrenches in the siting and permitting process that everything grinds to a halt. Stakeholder meetings frequently result in very large conference rooms overflowing with participants, everyone has a voice. This results in massive amounts of red tape and impossibly long consultation processes. Everyone must make sure he gets a cut in the process. South Africa would require an LNG terminal (or 3 of them) for many years now – and it might wait a decade or more before it gets one.

Mozambique’s LNG reserves, highlighted this week by the government’s approval of ExxonMobil’s Rovuma project, represent a major opportunity for South Africa, Standard Bank oil and gas analyst Paul Eardley-Taylor argues in research this week.

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