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Mozambique Issues New Regulations on Petroleum Infrastructure

With three Liquefied Natural Gas (LNG) plants underway and a number of local gas valourization facilities in view, Mozambique has reviewed its laws on Petroleum infrastructure.

Decree No. 84/2020, just approved by the government, is a clear and unambigouous statement that

petroleum infrastructure and petroleum operations can be set-up and executed, respectively, both on onshore and offshore.

That clarity is not available in the extant law, the Regulations on Licensing of Petroleum Installations and Activities (Ministerial Order No. 272/2009), which it grandfathers, but does not revoke.

The new regulation clarifies the responsibility of the regulator Instituto Nacional de Petroleo (INP) and strengthens its powers of inspection and sanction over petroleum infrastructure and operations;

Decree No 84/2020 updates and expands the types of infrastructures used in petroleum operations and includes a schedule for fees to be paid for the issuance of each license, as well as the statement of the need of paying an annual fee by entities which operate petroleum infrastructures and carry out petroleum operations.

It also, and language is important, replaces the terms “installations and petroleum activities” with “infrastructures and petroleum operations”.

The new Regulation states the rules and procedures for the licensing of the construction, installation, modification, replacement, operation and demobilization of petroleum infrastructures, including the storage and transportation by road, sea, river or railway of petroleum products, as well as the relevant permits and authorizations.

The Decree applies to all petroleum infrastructures to be installed by petroleum concessionaires, operators, their contractors and subcontractors and other legal entities engaged in the carrying-out of petroleum operations within the territory of Mozambique.
The construction, installation, modification, operation, demobilization of any infrastructure used for the carrying-out of petroleum operations either offshore or onshore, as well as those related to development wells, drilling rigs, production, storage and transportation by vehicles, are now subject to mandatory licensing by the National Petroleum Institute (INP).The installation of petroleum infrastructures during the prospecting phase, installation and operation of petroleum infrastructures for a period below 180 days, replacement of parts or components of a petroleum infrastructure, as well as the transportation of petroleum by road, sea, river or railway, is now subject to INP’s authorization. Additionally, the installation of petroleum infrastructures during the prospecting phase and the installation and operation of petroleum infrastructures for a period below 180 days, is also subject to registration with the INP.
Thus, the new Regulation has expanded the authority of the INP in terms of licensing and authorization in the Oil and Gas sector.

 

 


TOTAL Signs $15Billion Mozambique LNG Financing with Lenders

French major TOTAL has announced the signing of a $14.9Billion senior debt financing agreement for Mozambique LNG.

The project is the country’s first onshore LNG development. It includes the development of the Golfinho and Atum natural gas fields located in Offshore Area 1 concession and the construction of a two-train liquefaction plant with a total capacity of 13.1 million tons per annum.

Mozambique LNG represents a total post-FID investment of $20Billion. The project financing amounts to $14.9Billion, the biggest ever in Africa, and includes direct and covered loans from 8 Export Credit Agencies (ECAs), 19 commercial bank facilities, and a loan from the African Development Bank.

“The ECAs participating in the financing include Export Import Bank of the United-States (US-Exim), Japan Bank for International Corporation (JBIC), Nippon Export and Investment Insurance (NEXI), UK Export Finance (UKEF), Servizi Assicurativi del Commercio Estero of Italy (SACE), Export Credit Insurance Corporation of South Africa (ECIC), Atradius Dutch State Business (Atradius), Export-Import Bank of Thailand (EXIM Thailand)”, TOTAL says in a statement.

 

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