Galp to invest in Mozambique fuel storage expansion
Portuguese energy firm Galp plans to invest 125.4 million euros in logistics to increase its fuel storage capacity in Mozambique, an official said on Thursday.
Paulo Varela, a Galp official working in Mozambique, said the company is building bases in Beira and Matola for the storage and onward transport of liquid fuels and gas, which would be sold to Botswana, Zimbabwe and the Democratic Republic of Congo.
The official told visiting Portuguese Deputy Minister of the Economy, Pedro Siza Vieira that the proposed expended logistics terminal under construction in Matola would “enhance the use of port and rail facilities to the benefit of Mozambique.”
It is expected to provide “greater security and reliability” in the supplies of gas and would double the storage capacity for gas in southern Mozambique to 6,000 tonnes.
After completion of the terminal, Galp would have four logistics bases in Mozambique, where it also operates 120 filling stations.
“This is going to help Mozambique and neighbouring countries hit by fuel shortages” Varela added.
This news comes after Galp’s chief executive Carlos Gomes da Silva said In June that “the next decade will be Mozambique’s decade” in the world market for natural gas.
Silva believes that Mozambique will satisfy burgeoning demand in the international gas market that cannot be satisfied by existing producers, but admitted it would be necessary to prevent the cost of producing gas from rising precipitately, as was the case with similar projects in Australia.
“We are working to optimize this and make sure we keep the project competitive,” he said. Galp holds 10 percent of the Coral Sul project in Cabo Delgado province, and forms part of the consortium led by Eni, which includes the Portuguese oil company Galp, alongside South Korea’s Korea Gas and the Mozambican company Empresa Nacional de Hidrocarbonetos (ENH), and is to invest a total of US$8 billion.
The consortium’s priority is to ensure low operating costs, rather than pursuing a rapid progression at any cost, and estimates that actual production of liquefied natural gas in Mozambique will start in 2022.