LNG boosts Mozambique’s infrastructureDecember 25, 2018
Benoît Buron, the managing director of AMT Mozambique, talks to TOGY about the market’s potential, the qualifications of the workforce and the development of the logistics sector in the country. AMT Mozambique, formerly a subsidiary of Necotrans Group, provides logistics services and personnel support services for the oil and gas industry and has worked on seismic, geophysics, geotechnics and drilling campaigns along the years.
• On Mozambique’s outlook: “Just in the last six months we’ve seen an acceleration, even before the FIDs of the key LNG projects. I can say that many new companies have been coming to assess the market.”
• On logistics: “For the coming year we know that apart from the engineering challenges and the offshore part of the project, logistics is going to be the main challenge for the LNG onshore project.”
• On bureaucracy: “Authorities are very efficient here compared to many other countries in sub-Saharan Africa. The mindset is about helping activity and the economic actors to be able to operate and run their projects. From this perspective, things work.”
• On the workforce: “Many skilled people, or people who were trained in the first phase of development of oil and gas in Mozambique, have left the oil and gas industry because they were laid off due to lack of work. They’ve gone to other industries.”
How do you assess the potential of Mozambique?
Just in the last six months we’ve seen an acceleration, even before the FIDs of the key LNG projects. Many new companies have been coming to assess the market.
Some have already signed the contract, others are tendering, but nonetheless, it means that things are happening, and definitely for the coming year we know that apart from the engineering challenges and the offshore part of the project, logistics is going to be the main challenge for the LNG onshore project. Knowing that it’s happening in the north of Mozambique, which is one of the most underdeveloped areas with the least infrastructure, and considering the size of those projects – which are massive – this is going to be one of the main challenge. Obviously it means there are going to be a lot of opportunities for logistics.
How will the new port developments revitalise marine infrastructure?
The Pemba Logistics Base, or PLB, in Cabo Delgado province is expected to be able to receive ships in January 2019, but I prefer to remain conservative and consider what is already in existence and operational. What is operational and existing in the north of the country remains roughly what it was four or five years ago.
The pace of development at the PLB is a bit slower what was announced, but at least it will create a new dedicated facility for the support of offshore operations. It will definitely increase the capacity to receive vessels from a draught point of view, as we gain four to five metres on low tide compared to what we have right now in Pemba. That’s quite significant.
It will obviously ease movement, because right now the port and infrastructure that exists in Pemba is in the middle of the city, so access is fairly limited compared to a base that would be placed outside the city and would allow for a lot more flexibility in terms of cargo movement.
At the same time Pemba port has started a refurbishment process and some new assets acquisition which will surely improve its operational capacities.
This is a positive sign overall for us as a logistics service provider. We look forward to the development of port of Nacala, which is under extension processes right now. That’s also a positive – it’s already a very impressive port for sub-Saharan Africa as per my experience, so it will most probably also play a role in the future development of projects in the north of Mozambique.
Do you face any logistics challenges in the country?
Right now I wouldn’t say they are challenging, because the level of activity doesn’t make it a real problem. Authorities are very efficient here compared to many other countries in sub-Saharan Africa. The mindset is about helping activity and the economic actors to be able to operate and run their projects. From this perspective, things work.
Obviously, with the Coral project starting soon, some of the mines and renewable projects due to happen in Cabo Delgado next year, plus, potentially, the LNG onshore project, from one day to another we can really anticipate that we will have some obstacles, because infrastructure right now as it exists is definitely not at the capacity that will be required. On the other hand, even if the authorities have the will, current resources are limited compared to what the project will require, for sure.
Will there be enough workforce in the country once projects pick up?
This is going to be the main challenge since many skilled people, or people who were trained in the first phase of development of oil and gas in Mozambique, have left the oil and gas industry because they were laid off due to lack of work. They’ve gone to other industries such as mining and construction – you name it.
Some might return because of the attractive packages on offer, but many most probably won’t come back. The ones who tried to remain in the industry have suffered for three or four years, and they want a sustainable career for the sake of their families. This is a problem for the industry. Some will be able to develop again to get them back, but it means we’re starting over again, almost from scratch.
How is the local logistics market in terms of competition?
Mozambique, in my experience, is very, very different from one port to another. I wouldn’t talk about the logistics market in Mozambique in general, but rather each port has its own life and is complicated. In fact, there are many different players from one port to another, so if you go to a more mature port like Maputo, it’s a very tough market: You can see the margins are quite small and there are already a lot of ongoing projects that are being controlled. That’s obviously tougher in terms of competition.
Then you have ports like Nacala, or even Pemba, that are newer and more niche and where the competition is definitely different. Especially at Pemba, we don’t feel the competition the same way as we do in other ports.