Link to article: https://www.africaoilandpower.com/2021/02/25/mozambique-leverages-strategic-position-to-fuel-lng-growth/
The International Energy Agency (IAE) expects the demand for natural gas to recover from the decrease it suffered as a result of the Coronavirus pandemic. This expected economic flourishing offers Mozambique the chance to become a powerful Liquified Natural Gas (LNG) exporter because Mozambique has recently discovered large reserves of natural gas within the country. Mozambique has the potential to become a regional LNG exporter.
The IAE also noted that the majority of the world’s gas consumption currently comes from the Asia-Pacific region, mostly due to increased consumption in China and India, specifically. Separately, many countries are beginning to prefer natural gas over other fossil fuels such as coal and oil because it is better for the environment.
Mozambique is geopolitically predisposed to gain power over the Asian-Pacific natural gas market because it is physically located close to the region. Therefore, transportation of the natural gas would be faster and cheaper than the transportation of a country located farther away. This could keep production costs low as well as minimizing the opportunity cost. Mozambique is also in a good position to grow its oil market because its neighboring countries have an increasing need for energy resources as they become more developed.
The market for natural gas is notably growing worldwide as countries and manufacturers are beginning to favor it over other “dirtier” forms of energy like traditional fossil fuels. This puts Mozambique in the unique position of having the opportunity to become a large player in a global energy market due to its geopolitical features (location and natural resources).
South Africa also has plans to build a cross-country pipeline in order to more effectively import natural gas from Mozambique. The project is titled the African Renaissance Pipeline Project, and it will likely lead to a large boost in Mozambique’s economy due to increased natural gas exports. The pipeline will also feature sub-pipelines that will create passageways for oil into other countries such as Zimbabwe and Zambia.