What is the specific scope covered by the Saipem and Jan De Nul agreement?

The Letter of Intent covers early engineering, procurement, and upstream infrastructure execution needed to deliver natural gas from deepwater Area 4 reservoirs to the export terminal. This typically involves subsea production systems, pipelines, subsea umbilicals, and associated marine installation works.

How does Rovuma LNG differ from the Coral South project in Mozambique?

Coral South is a smaller, operational floating LNG (FLNG) unit producing approximately 3.4 mtpa entirely offshore in Area 4. In contrast, Rovuma LNG is an onshore-based, modular export project planned for a significantly larger capacity of up to 18 mtpa situated at the Afungi complex.

Does this contract award mean Rovuma LNG has achieved Final Investment Decision (FID)?

No, a Letter of Intent represents an advance preparatory agreement that allows preliminary engineering and procurement preparations to proceed. The full engineering, procurement, and construction contract will only be formally sanctioned when the joint venture partners execute their formal FID, projected for 2025 or 2026.

Rigzone · September 11, 2026 (3h ago) · 1 min read

Saipem Signs New Preliminary Contract for Rovuma LNG

ExxonMobil

Isometric technical illustration of offshore oil and gas operations with drillship and support vessel — Illustration: ExxonMobil

Analysis

AI-assisted analysis · reviewed by Yuri Kan

ExxonMobil has advanced the pre-FID engineering phase for Mozambique's flagship Rovuma LNG development by executing a Letter of Intent with a joint venture formed by Saipem and Jan De Nul. This preliminary award covers key engineering, procurement, and construction activities for the project's upstream infrastructure, marking a tangible milestone toward reviving offshore Area 4 development. The move signals growing operator confidence in East African frontier liquefied natural gas monetization after years of security-driven operational suspensions.

Key Facts

Italy's Saipem and Belgium's Jan De Nul entered into a Letter of Intent (LOI) to deliver upstream infrastructure for the Rovuma LNG venture.
ExxonMobil acts as the lead operator for the onshore liquefaction and upstream developments within Mozambique's deepwater Offshore Area 4.
The upstream infrastructure scope comprises offshore facilities, flowlines, and subsea tiebacks designed to funnel natural gas to the planned onshore export terminal.
The overall Rovuma LNG project is designed around an ultra-modular liquefaction concept with a targeted capacity of up to 18 million tonnes per annum (mtpa).
Security concerns and local insurgent activity in Cabo Delgado province had previously caused prolonged force majeure events across northern Mozambique LNG ventures.

Background & Context

Mozambique holds immense offshore gas reserves in the Rovuma Basin, primarily across Area 1, operated by TotalEnergies, and Area 4, led by Eni and ExxonMobil. In 2021, an escalation of insurgent attacks linked to Islamic State affiliates forced operators to declare force majeure and stall onshore construction activities at the Afungi LNG park. While Eni successfully brought the 3.4 mtpa Coral South Floating LNG vessel online in Area 4 offshore, the larger onshore-based export schemes remained frozen pending stabilized security conditions and redesigned plant economics.

Market Impact

The execution of this LOI indicates that ExxonMobil and its joint venture partners are progressing closer to a formal final investment decision (FID) for Rovuma LNG. Saipem’s selected involvement also strengthens its position as a dominant EPC contractor for mega-LNG projects, leveraging its extensive regional marine engineering footprint. From a global supply perspective, an eventual 18 mtpa development in Mozambique will increase low-cost LNG availability intended for energy-deficient markets across Europe and Asia. Furthermore, this preliminary agreement provides positive momentum for TotalEnergies to consider fully lifting force majeure on its adjacent Mozambique LNG project.

What to Watch

Industry stakeholders will closely monitor whether ExxonMobil and Eni take a final investment decision on Rovuma LNG, which is currently targeted for late 2025 or early 2026. Ongoing evaluations of regional security by Mozambican defense forces and regional security partners will dictate when full-scale on-site civil works can begin. Observers will also track the finalization of the commercial EPC contract between the operator and the Saipem-Jan De Nul consortium.

Why This Matters for Cyprus

While this development is based in Mozambique, regional IOCs active there—including Eni and ExxonMobil—also dominate offshore exploration and development in the Eastern Mediterranean, particularly across the Cyprus EEZ. Capital allocation decisions and modular LNG engineering strategies deployed by these supermajors inform their broader corporate priorities and commercial choices regarding regional gas monetization in the Levantine Basin.

Frequently Asked Questions

What is the specific scope covered by the Saipem and Jan De Nul agreement?: The Letter of Intent covers early engineering, procurement, and upstream infrastructure execution needed to deliver natural gas from deepwater Area 4 reservoirs to the export terminal. This typically involves subsea production systems, pipelines, subsea umbilicals, and associated marine installation works.
How does Rovuma LNG differ from the Coral South project in Mozambique?: Coral South is a smaller, operational floating LNG (FLNG) unit producing approximately 3.4 mtpa entirely offshore in Area 4. In contrast, Rovuma LNG is an onshore-based, modular export project planned for a significantly larger capacity of up to 18 mtpa situated at the Afungi complex.
Does this contract award mean Rovuma LNG has achieved Final Investment Decision (FID)?: No, a Letter of Intent represents an advance preparatory agreement that allows preliminary engineering and procurement preparations to proceed. The full engineering, procurement, and construction contract will only be formally sanctioned when the joint venture partners execute their formal FID, projected for 2025 or 2026.

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