Ashby-Rudd says that the unearthing of natural gas in the Rovuma basin of Mozambique may bring more than $30bn worth of ventures between 2013 and 2018.
Fausio Mussa, chief economist at Standard Bank Mozambique, says the planned development of natural gas projects in the Rovuma Basin, and associated infrastructure spending, will result in Mozambique's accelerated gross domestic product (GDP) growth to above-average.
Mozambique has a population of just over 25 million, about half the size of South Africa's. Its economy is growing almost twice as fast as South Africa's, though obviously off a far lower base. The Economist Intelligence Unit said in a recent report on Mozambique that the country's GDP could grow 7.3% this year and 7.6% next year, while the International Monetary Fund is predicting growth of 8.3% this year and 7.9% next year, positioning Mozambique among the fastest growing economies in Africa and the world.
Mozambique's government has already begun reaping the benefits of the nascent gas industry. It has received almost $1bn in the past 12 months in taxes from gas-related deals, while Maputo, the capital, is undergoing a property boom as the industry's potential stimulates demand for office space and housing.
Palma, a town in northern Mozambique, will soon become known as the 'city of gas', covering nearly 20,000ha and projected to house more than 250,000 people. This planned metropolis will be home to giant liquefied natural gas (LNG) plants and a range of energy-intensive industries, plus golf courses, luxury housing estates, shopping malls and hotels.
This sounds like a mega-project in the oil-rich Gulf, but is in fact the future development plan for this gas rich African region. The plans highlight the ambitions of Mozambique as it prepares to harness vast reserves that have the potential to transform it into one of the world's leading natural gas producers.
Speaking on the sidelines at the Abu Dhabi International Petroleum Exhibition and Conference, the president of Strategies et Politiques Energetiques, Francis Perrin, told Mozambique media agency AIM that over the last twenty years natural gas has gained several advantages over oil. In particular, it is the cleanest fossil fuel and is increasingly in demand as the world's economy grows.
He said that Mozambique has huge deposits of high quality gas which enables investors to take a very long term view on investments. The country's Southern African neighbours, which need electricity for economic growth and poverty alleviation, are also hoping to benefit.
