Saipem S.p.A., leading the SMDC joint venture with McDermott Energy Solutions (UK) Ltd., Korea’s Daewoo Engineering & Construction Co. Ltd., and China Petroleum Engineering & Construction Corp., has signed a Letter of Intent (LoI) with ExxonMobil Moçambique, Limitada, to launch preliminary engineering and procurement work for Mozambique’s Rovuma LNG onshore facility.
Rovuma LNG operator ExxonMobil signed the LoI on behalf of its Area 4 partners to proceed with the $32 million limited engineering and procurement services while the framework for the project’s engineering, procurement, and construction (EPC) is finalized. Saipem and McDermott reported in separate news releases on 7 August. The overall Rovuma LNG development is estimated at roughly $30-32 billion.
The LoI serves as a bridge to the final EPC contract, which is expected to be awarded to the SMDC joint venture once the Area 4 partners, including ExxonMobil, Eni, CNPC, KOGAS, XRG (ADNOC’s investment arm) and Mozambique’s ENH declare a final investment decision (FID).
FID is expected by the end of 2026, along with required government and regulatory approvals, according project participants.
The current LoI and final EPC award follows a front-end engineering design contract awarded to the SMDC partnership in August 2024.
ExxonMobil’s Biggest Single Investment Globally
The Rovuma LNG onshore natural gas liquefaction plant on the Afungi Peninsula is ExxonMobil’s largest single investment globally. The facility is expected to include two LNG trains comprising 12 modular liquefaction modules, with total production capacity of approximately18.6 mtpa total capacity and a targeted startup in 2031.
McDermott, the majority shareholder in the SMDC joint venture, will execute the core engineering work for the inside battery limits scope, including the liquefaction modules, from its London and Gurgaon offices. Project management, procurement services, and execution strategy will be coordinated through the Saipem-led SMDC team in Milan, McDermott said.
“Our experience on Mozambique LNG, combined with our long-term commitment to the country, positions us to deliver critical infrastructure that supports Mozambique's emergence as a major global LNG supplier,” McDermott’s CEO and board chair, Michael McKelvy, said.
“This award reflects the strength of our long-standing relationship with ExxonMobil and our ability to deliver complex LNG developments,” Rob Shaul, McDermott's Senior Vice President of Low Carbon Solutions, also commented. “Having successfully executed front-end engineering design (FEED) for Rovuma LNG, we are well positioned to advance the project into its next phase.”