Mozambique’s Rovuma LNG moves closer to FID as McDermott receives letter of intent

Africa’s largest private investment inches closer to making a financing decision.

What: Operator ExxonMobil Mocambique has provided McDermott with a letter of intent to commence limited engineering and procurement services for Rovuma LNG.

Why: The project’s partners are keen to make a final investment decision in the coming months, while nearby project Mozambique LNG has been pushing ahead with construction.

What Next: The financing decision is expected to be taken before the end of the year, while start-up of the LNG facility is forecast for 2031.

Africa’s largest private investment, Rovuma LNG has creeped forward as the project’s operator ExxonMobil Mocambique provided a letter of intent on August 6 to US contractor McDermott to begin limited engineering and procurement services.

The project’s partners ExxonMobil, Eni, and China National Petroleum Company (CNPC) had initially been targeting making a final investment decision (FID) by September, but have now scaled back timelines to making a decision before the end of 2026.

The $20 bn project will consist of 12 modular trains and boast a production capacity of 18.6 mn tonnes per year (tpy). The facility, located on Mozambique’s northeastern coast in Cabo Delgado province is expected to come online in 2031. The project represents ExxonMobil's largest single investment.

McDermott will build on its experience in Mozambique. The Houston-headquartered contractor is also working on the nearby Mozambique LNG project with Italy’s Saipem and Japan’s Chiyoda.

“Our work on Rovuma LNG builds on McDermott's established LNG expertise in Mozambique and our disciplined approach to execution,” Michael McKelvy, McDermott’s Chief Executive Officer and Chair of the Board said in a statement.

“Our experience on Mozambique LNG, combined with our long-term commitment to the country, positions us to deliver critical infrastructure that supports Mozambique's emergence as a major global LNG supplier,” McKelvy added.

McDermott executed the front-end engineering design (FEED) and will handle the modular liquefaction engineering. It will also be part of the broader SMDC consortium.

Within the consortium, Saipem will provide offshore and onshore energy infrastructure expertise and South Korea’s Daewoo will specialize in plant construction. China Petroleum Engineering & Construction Corporation (CPECC) will offer the group extensive large-scale construction capabilities.

Maputo has high hopes for Rovuma LNG. The project is projected to bring in about $150 bn in revenues for Mozambique over its 30-year lifespan. Moreover, the project is expected to add approximately $11 bn annually to the country's GDP, while also providing jobs for over 150,000 people, according to a study conducted by Standard Bank.

Progress on the nearby Mozambique LNG has also raised hopes for FID to be taken shortly for Rovuma. Mozambique LNG, which is also being built in Cabo Delgado province is close to 45% complete with production at its first liquefaction train projected to begin in 2029.

The discovery of natural gas in the Rovuma Basin is located in the deep waters off the coast of Cabo Delgado province has provided enormous optimism for Mozambique to become a powerhouse in the hydrocarbon sector.

However, it has a been bumpy ride since the discovery of the natural gas. A terror attack in the nearby town of Palma in April 2021 caused work on the projects to grind to a halt for five years.  

After improvements were made to the security situation, the consortium lifted force majeure in November 2025 and announced the full restart of onshore and offshore activity on January 29 for Mozambique LNG.

Around 8,000 people are now working on site at the TotalEnergies-led project, which upon completion will have a production capacity of 13.1 mn tpy.

Mozambique became an LNG exporter when it shipped its first cargo to Spain in December 2022 from the Eni-operated Coral Sul floating LNG (FLNG) terminal.

The FLNG vessel anchored at the field in 2,000-metre-deep water, was the first floating gas liquefaction plant ever to be deployed at a deepwater site off the coast of Africa.

Meanwhile, Eni’s Coral Norte FLNG project was approved in 2025 and is scheduled to begin production in 2028. Combined with Rovuma LNG and Mozambique LNG, the country could boast more than 38 mn tpy of LNG production capacity, which would establish Mozambique as one of the world’s leading LNG exporters.

Indeed, Maputo has its eyes on the prize with the LNG sector and in July announced that the country’s national oil company, Empresa Nacional de Hidrocarbonetos (ENH), has agreed to strengthen cooperation with the African Energy Chamber (AEC) as Mozambique seeks to unlock more private-sector participation in the country’s gas sector.

Maputo hopes that the Chamber’s international investor network can be linked with ENH’s development priorities to help mobilise capital and strengthen collaboration across Mozambique’s hydrocarbon sector.

With more than $50 bn committed to projects in the Rovuma Basin since force majeure was lifted in late 2025, Mozambique is now all-in on the development of its LNG industry. With the green light for McDermott to begin engineering and procurement services at Rovuma LNG, FID appears to be just around the corner and a clear path is forming for the southern African country to become an LNG exporting superpower.