Rovuma LNG Orders Subsea Systems From SLB OneSubsea: Mozambique Gas Outside the Hormuz Chokepoint

SLB said on Tuesday that its OneSubsea joint venture has won the subsea production contract for the first phase of Rovuma LNG, the 18.6 million tonne a year export project ExxonMobil leads in northern Mozambique. Phase one links 18 subsea wells in Area 4, through pipelines and manifolds, to a liquefaction plant onshore in Cabo Delgado province. OneSubsea (owned by SLB, Aker Solutions and Subsea7) supplies the subsea trees, manifolds, umbilicals and control systems. It will engineer and build the kit, then support its installation, and it plans a services base in Mozambique to work for other operators in the region. SLB gave no contract value and no delivery date.

The order belongs to a package ExxonMobil announced on August 17: about $1.1 billion of contracts for the equipment that takes longest to make (subsea systems, large-bore valves, offshore line pipe). OneSubsea's award was the biggest piece. On September 10 a Saipem and Jan De Nul consortium signed a letter of intent for the pipeline and installation work, but its full contract only comes with a final investment decision.

That decision hasn't come. Mozambique's president said in July he expected one by September; September is ending without it, and ExxonMobil's only public target now is 2026, which leaves three months. Buying subsea trees early protects a schedule the partners haven't committed to yet, with start-up pencilled in for 2031. Galp, which sold its 10 percent of the block to ADNOC's XRG last year, is still owed $400 million once the project gets its yes.

The Partner List Is the Hormuz Story

ExxonMobil placed the order for the whole Area 4 group: Mozambique's state company ENH, Italy's Eni, China's CNPC, Korea Gas Corporation (KOGAS) and XRG, the international investment arm of the Abu Dhabi National Oil Company. ExxonMobil, Eni and CNPC hold 70 percent of the block through a shared company (ExxonMobil's indirect share is 25 percent). KOGAS, ENH and XRG own 10 percent each.

Set that list against the strait. Before the war, about a fifth of the world's LNG supply went through Hormuz. Qatar has no other way out; every cargo from Ras Laffan bound for Asia or Europe has to make the crossing, and its energy minister says a pipeline around the strait would make no economic sense. In the first six months of the war Qatar shipped 18 cargoes. In the same months a year earlier it shipped 509. Sailings picked up in late September to the busiest pace in more than two months, still a fraction of the roughly three cargoes a day that moved through before the war. The UAE at least has a crude pipeline to Fujairah. It has nothing like it for gas.

In July and August alone, Qatari deliveries to the big Asian markets ran nearly 10 million tonnes below a year earlier. China and South Korea are two of Qatar's biggest customers, so CNPC and KOGAS know exactly what a closed strait costs. XRG is the sharper case. ADNOC's own LNG loads inside the Gulf, on the wrong side of Hormuz. XRG's stakes in Mozambique and in Texas's Rio Grande LNG put some of the group's gas where it never has to go near the strait.

None of it was bought as a war hedge. CNPC and KOGAS have been in the block for more than a decade, and ADNOC agreed to buy Galp's stake in May 2024, long before the war. The blockade has shown what that spread of supply is worth.

Rovuma Won't Ship Before 2031

Rovuma won't ease this winter's shortage, or the next three. The nearer Hormuz-free volume from Area 4 floats: Coral South has produced LNG since 2022, and Coral North, sanctioned last October, adds about 3.6 million tonnes a year from 2028. Next door in Area 1, TotalEnergies is aiming for first cargoes from its Mozambique LNG in 2029.

The onshore plant also carries a risk the floating units mostly avoid. It will stand at Afungi, sharing facilities with TotalEnergies' project, which restarted in January after a halt of nearly five years that began with the 2021 insurgent attack on Palma. The insurgency hasn't gone. More than 400 conflict incidents were logged in northern Mozambique in the first half of this year, and Washington tells its citizens not to travel to Cabo Delgado at all. Rwandan troops still carry much of the security load. OneSubsea's hardware will sit on the seabed, far offshore. The twelve liquefaction modules it feeds will be on land.

The sea lanes have chokepoints of their own. A cargo from Cabo Delgado to Korea or China still passes through Southeast Asia's straits, and one bound for Europe has to pick between the Red Sea and the long way round the Cape. What drops off the route is the strait that has kept Gulf LNG bottled up since the spring.

ExxonMobil has ordered the subsea trees. It still hasn't said yes to the plant.