MAPUTO, The Mozambican government and the Norwegian company, Yara, have signed a memorandum of understanding (MoU) on the supply of natural gas from the offshore fields in the Rovuma Basin, in the far north of the country, for domestic use.

Signing the agreement here Monday were the Minister of Mineral Resources and Energy, Leticia Klemens, and the Vice President of Yara, Jim Eilertsen.

The MoU follows the results, announced on Jan 27, of the public tender for the use of the gas on the domestic market. Yara submitted one of the successful bids. It applied for 80 to 90 million cubic feet of gas a day in order to produce 1.2 to 1.3 million tonnes of fertilizer a year, and to generate 30 to 50 megawatts (MW) of electricity.

The Ministry said in a media statement: The signing of the agreement with Yara is an important step in implementing the 2014 Master Plan for Mozambique’s gas, which seeks to use the huge reserves of gas in the Rovuma Basin to develop and diversify the industrialisation of the country.”

The Ministry added that the government’s five-year programme for 2015-2019 envisaged the local production of fertilizers, fuel and energy in order to strengthen still further the balance of trade, the availability of foreign currency reserves, increased yields in agriculture, and the expansion of the electricity grid.

The other successful bids announced in January were from Shell-Mozambique and the London-based GL Energy Africa.

Shell requested between 310 and 330 million cubic feet of gas a day to produce liquid fuels (including diesel and kerosene) and to generate 50 to 80 MW of electricity while GL Energy asked for 41.8 million cubic feet a day in order to produce 250 MW of power.