Following a project update from its joint venture partner, McDermott, Italy’s engineering, drilling, and construction services giant Saipem has corroborated the progress made in moving forward with the next phase of one of Africa’s most closely watched liquefied natural gas (LNG) developments, as new activity signals continued momentum toward a final investment decision (FID) for Mozambique’s multibillion-dollar LNG project.
On the heels of McDermott’s announcement, Saipem has confirmed the signing of a letter of intent (LOI) for the ExxonMobil-operated Rovuma LNG Phase 1 project in Mozambique. The final award to the Italian giant within the SMDC joint venture, which entails McDermott, Saipem, Daewoo Engineering & Construction, and China Petroleum Engineering & Construction Corporation (CPECC), is subject to FID and government and regulatory approvals expected within 2026.
The LOI was penned with ExxonMobil, on behalf of the Area 4 partners, including Mozambique Rovuma Venture (MRV), comprising ExxonMobil, Eni, and China National Petroleum Corporation (CNPC), as the operator of the Area 4 block with a 70% interest in the concession, and KOGAS, Empresa Nacional de Hidrocarbonetos (ENH), and ADNOC’s XRG, each holding a 10% stake. The Rovuma LNG project is estimated to cost around $30 billion.
The letter of intent covers limited preliminary engineering and procurement activities, aimed at advancing project definition and execution planning for an initial value of $32 million. The final award of the engineering, procurement and construction (EPC) contract to the SMDC joint venture is subject to positive FID by the Area 4 deepwater block partners and receipt of the necessary government and regulatory approvals, which is expected within 2026.
This follows the front-end engineering design (FEED) contract previously handed out to the SMDC partnership in August 2024. The Rovuma LNG project involves the development of an onshore natural gas liquefaction plant on the Afungi Peninsula, encompassing two LNG trains with 12 modular liquefaction modules and an expected overall production capacity of approximately 18.6 million tonnes of LNG per year.
As part of the joint venture, Saipem intends to leverage its extensive experience in the development and execution of large-scale LNG projects and complex energy infrastructures, contributing to the engineering and procurement activities required to support the definition and preparation of the project.
“This letter of intent further strengthens Saipem’s position in the liquefied natural gas sector and highlights the group’s expertise in executing large-scale, complex energy projects, contributing to the potential development of one of the most significant LNG initiatives currently under planning worldwide,” highlighted the Italian giant.
The Area 4 block in the Rovuma Basin, which is estimated to contain approximately 85 trillion cubic feet of natural gas resources, encapsulates Eni’s operational Coral Sul FLNG development, the planned Coral North FLNG project, and the ExxonMobil-led Rovuma LNG onshore liquefaction project.
While MRV operates the Area 4 concession, ExxonMobil Mozambique is the delegated operator responsible for the construction and operation of the Rovuma LNG facilities, with start-up anticipated in 2031.
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