McDermott Energy Solutions (UK), a subsidiary of the U.S. offshore engineering and construction player McDermott, has secured a letter of intent (LOI) for a proposed liquefied natural gas (LNG) project with ExxonMobil Moçambique, a subsidiary of the American energy giant ExxonMobil, on behalf of partners in a deepwater block off the coast of Mozambique.
McDermott Energy Solutions, a subsidiary of McDermott and a majority shareholder in the SMDC joint venture with Saipem, Daewoo Engineering & Construction Co. Ltd., and China Petroleum Engineering & Construction Corporation (CPECC), has been awarded by ExxonMobil Moçambique, on behalf of the Area 4 partners, a letter of intent, including limited engineering and procurement services, for the continuation of the Rovuma LNG Phase 1 midstream development.
While emphasizing that the SMDC joint venture brings extensive global experience in the engineering, procurement, and construction of LNG facilities, McDermott explains the work with ExxonMobil supports continued project definition and planning as the Area 4 partners progress toward a final investment decision (FID), expected in 2026. The current cost estimate for the Rovuma LNG project is around $30 billion, although the exact final cost has not been fixed because the project has not yet reached FID.
Michael McKelvy, Chief Executive Officer and Chair of the Board for McDermott, commented: “Our work on Rovuma LNG builds on McDermott’s established LNG expertise in Mozambique and our disciplined approach to execution. 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.”
Mozambique Rovuma Venture (MRV), comprising ExxonMobil, Eni, and China National Petroleum Corporation (CNPC), is the operator of the Area 4 block exploration and production concession contract with a 70% interest in the concession, with the remaining 30% split evenly between KOGAS, Empresa Nacional de Hidrocarbonetos (ENH), and ADNOC, after it inked a deal to acquire Galp’s 10% interest in May 2024.
The Area 4 block in the Rovuma Basin contains approximately 85 trillion cubic feet of natural gas resources. The block includes 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. The Rovuma LNG project onshore development is expected to include 12 modular liquefaction modules designed to produce 18.6 million tonnes of LNG per year, with start-up anticipated in 2031.
Rob Shaul, McDermott’s Senior Vice President of Low Carbon Solutions, emphasized: “This award reflects the strength of our long-standing relationship with ExxonMobil and our ability to deliver complex LNG developments. Having successfully executed front-end engineering design (FEED) for Rovuma LNG, we are well positioned to advance the project into its next phase.”
McDermott elaborates that the engineering of the inside battery limits (ISBL), including the liquefaction modules, will be executed from its London and Gurgaon offices, with project management seconded to the JV team based in Milan. Rovuma LNG is expected to deliver approximately $150 billion in revenues to the government of Mozambique over the project’s 30-year life.
In addition, the LNG project could add around $11 billion annually to Mozambique’s gross domestic product (GDP), and employ more than 150,000 people, according to a macroeconomic study released by Standard Bank.
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