W|EPC: Mozambique LNG – Baseline Report & On-Site Satellite Image Analysis (Q121)

Mozambique LNG – Q121
Baseline Report & On-Site Satellite Image Analysis
Project Owners: Total, Mitsui, ENH, PTT, etc.
LNG Buyers: Tokyo Gas, JERA, Centrica, Shell, CNOOC, EDF, etc

For access information please contact us at [email protected]

Key Takeaways:
Mozambique LNG (MZLNG): After A Sluggish Start…The Next 6 Months Are Critical.

• Q320 & Q420 satellite images indications… (pgs. 15-18)
• 17-months after FID, meaningful piling, concrete, &/or structural steel erection [redacted]…
• Recent security issues (increasingly localized terrorism) could further hamper staffing levels and complicate the path forward (while also potentially creating the pretense for Force Majeure relief).

Schedule Analysis & Estimates: W|EPC Estimate MZLNG is…

• Our proprietary risk model implies a probability of the project meeting its original cost/schedule metrics is [redacted] (page 5)
• EPC Contract Exposure: ~$8B LSTK contract, via a consortium comprised of Saipem (74.95%, SAPMF), McDermott (24.98), MDR) & Chiyoda (0.07%,)
• Note: a successful project would boost Saipem’s reputation, while also certainly meaningful for a restructured MDR ($560MM Raise on Jan 5, 2021).

Mozambique vs. LNG Canada

• MZLNG & LNG Canada share similar characteristics, specifically: a remote area, greenfield, man-camp, etc. (page 4)
• Key differences: MZLNG’s has lower-cost construction wages, shorter project schedule, but 300% more peak labor (~11k craft workers).
• Should MZLNG require even more labor given the circumstances described in pages that follow, it would likely require an even more significant pull from local labor (on-site housing can support ~9.5k workers).
•  MZLNG is located in one of the least developed areas of Mozambique, which creates unique risks around that heavy lean on local labor, even before considering the uptick in localized terrorism. (page 12)

Mozambique LNG: Baseline Report Q121

Mozambique LNG: Baseline Report Q121 (Page 15)

W|EPC: Mozambique LNG – Baseline Report & On-Site Satellite Image Analysis (Q121)

For access information, please email us at [email protected], or reach out to Webber Research Institutional Sales at [email protected]