As Chinese gas investments in Africa take off, oil imports sink

China’s oil imports from Africa may have dropped sharply in recent years, but investments by Chinese companies in liquefied natural gas (LNG) are booming.

Nearly two decades ago, African oil accounted for close to a third of China’s imports. Now that figure has dropped to about 10 per cent, with China sourcing more of its oil from the Middle East and Russia.

But now in Africa, Chinese businesses are increasingly shifting into LNG investments – both to help China meet its swelling demand and to cut its reliance on Australian gas.

Mozambique, in particular, has emerged as a hotspot for global natural gas production following the discovery of more than 5 trillion cubic metres (176 trillion cubic feet) of natural gas reserves in the Rovuma basin, off the country’s northeast coast.

China National Petroleum Corporation (CNPC) holds a 20 per cent share in the US$30 billion Rovuma LNG project, which is set to see an 18 million tonne-per-year offshore facility built. The main partner in the project, US multinational ExxonMobil, said although the scheme had faced finance delays and worsening insurgency, it was on track to reach its final investment decision next year.

CNPC is also involved in another major scheme in Mozambique – the Coral Floating Liquefied Natural Gas project – which had its first LNG product shipped out in 2022.