Daewoo Engineering to Lead Mozambique's Rovuma LNG Phase 1 Project

Daewoo Engineering & Construction will participate as the main contractor in a large-scale liquefied natural gas (LNG) project in Mozambique.

On August 7, Daewoo announced that it has officially received a Letter of Intent (LOI) for the construction of an LNG liquefaction plant from ExxonMobil Mozambique, the lead company for the Rovuma LNG Phase 1 project.

Daewoo has formed a global consortium called 'SMDC JV' with Italy's Saipem, the U.S. firm McDermott, and China's CPECC to participate as the main contractor for this project.

The issuance of the LOI is a procedural step to carry out initial design refinement, procurement of key equipment, and construction feasibility reviews ahead of the final investment decision (FID).

The project is commissioned by Rovuma Venture S.p.A, a joint venture led by ExxonMobil, Italy's ENI, and China's CNPC, which holds a 70% stake, along with Korea Gas Corporation (10%), Mozambique's state-owned oil company ENH (10%), and Abu Dhabi's state-owned oil company XRG (10%).

The Rovuma LNG Phase 1 project aims to develop gas fields in the Area 4 block offshore northern Mozambique.

It will involve the construction of an eco-friendly LNG liquefaction plant capable of producing 18.6 million tons of LNG annually, along with a large gas combined cycle power plant powered by electric motors instead of gas turbines, and associated facilities. The first trial run and commercial operation are targeted for 2031.

Historically, the overseas LNG liquefaction market has been dominated by a small number of global construction firms due to the high-level technical expertise required for cryogenic process control. While domestic construction companies have primarily participated as subcontractors, Daewoo secured a main contractor position for the first time in South Korea during the 'Nigeria LNG Train 7' project in 2020, and is now recognized for standing alongside global EPC leaders in this Mozambique project.

A Daewoo representative stated, "The receipt of this LOI is a recognition of our capability to lead projects, breaking away from the limitations of domestic construction companies that have remained at the subcontractor level. We will fully support the initial design and procurement stages to ensure the FID scheduled for the end of this year proceeds smoothly, and we aim to solidify our long-term growth momentum through the transition to the main EPC contract."

Meanwhile, Bae Se-ho, a researcher at iM Securities, noted, "Daewoo has raised its new order guidance for this year from 18 trillion won to 27 trillion won, an increase of 9 trillion won. This includes 9 trillion won from five major projects totaling 18 trillion won, such as the Czech Dukovany nuclear power plant, Papua New Guinea CPF LNG, Nigeria Indorama, and Mozambique Rovuma LNG, as the basis for the guidance increase. If these orders are realized, it will significantly enhance the scale of the plant and civil engineering sectors."