Logistics parks as ideal for oil and gas companies in Mozambique

Logistics parks with strategic locations in Mozambique offer a unique benefit to gas and oil companies. Warehouses near road networks, airports, and rail lines provide the quick access needed for safe, secure storage of equipment, vehicles, and construction materials necessary for production of natural gas and oil.

The economy of Mozambique, one of Africa’s poorest countries, is forecast to grow by 4% in 2022.  One reason is the country’s drive to exploit its sizeable deposits of oil and natural gas. Mozambique is currently the third-largest holder of natural gas reserves in Africa, with 100 trillion cubic feet of reserves. The country’s reserves position it to be an international exporter and one of the world’s leading producers of both oil and gas in the coming years.

The Rovuma Basin off the coast of the Cabo Delgado Province in Mozambique is considered the new home of oil and gas. Three large liquefied natural gas (LNG) projects underway in this area have greatly increased the demand for logistics parks:

• The Rovuma LNG project is a $30 billion LNG project and the largest of the three. The project has been on hold due to an insurgent attack in the area, but investors are confident the project will move forward soon.
• The Rovuma Basin also hosts the Mozambique LNG project ($20 billion) and the Coral Floating LNG project (worth $4.7 billion).

The following will demonstrate specific benefits of logistics parks for both oil and gas companies and what to look for when choosing a logistics park warehouse.

Benefits of logistics parks for oil companies in Mozambique

Oil companies face many challenges in today’s world, including the growing concern about fossil fuels and their role in climate change. Long-term energy transitions aim to improve energy efficiency and use of renewable energy to lower the environmental impact of fossil fuels.

Agility warehousing offers a unique opportunity for multinational energy companies operating in the booming market in Mozambique. For them, logistics parks are invaluable. Oil companies in particular face challenges when it comes to the storage of heavy equipment, pipes, and other materials needed to produce oil. Logistics parks help alleviate those complications and ensure oil companies keep costs down.

How oil companies can use logistics parks

Typical uses of logistics parks include storage, processing, distribution, and light manufacturing. They offer oil companies covered and outdoor storage for high-value equipment and parts, chemicals and lubricants, vehicles and other goods, in addition to providing space for fabrication and maintenance.

How does this relate specifically to oil companies? Large-scale energy projects like those in the Rovuma Basin require construction and engineering that must be synchronized and carefully sequenced. Logistics parks provide secure covered and uncovered space to stage materials, equipment and crew work required.  Another important aspect of a logistics park is that they provide a central location, which enables those processes to be more efficient.

Unique benefits of logistics parks

Logistics parks offer many unique benefits, including reducing costs and saving companies’ time. The strategic location of logistics parks helps to streamline the transportation and warehouse needs of oil companies, thus increasing supply chain efficiency.

The Agility Logistics Park in Maputo, Mozambique, for example, is located on Maputo’s Ring Road with ready access to the Maputo Port and the main roadways to South Africa. The proximity of this logistics park to the port provides easy access to stored vehicles and pipes needed for major oil projects. Having these items stored close to drilling sites enables oil to be moved from offshore Mozambique to northern Mozambique and beyond in a more efficient and cost-effective way.

Reducing company costs and increasing productivity

Oil companies face unique and complex challenges with the supply chain. Special equipment needs and the vast number of pipes needed in oil production requires the assistance of logistics and logistics parks to guard against service interruptions and protect investment. Problems with drilling equipment in need of repair or replacement can be easily remedied if there is additional equipment stored nearby.

Logistics parks like the Agility Logistics Park warehouse in Maputo are ideally located and connected to road, air, rail, and sea networks. A strategic, central location reduces unnecessary transportation. A secure storage site for everything needed to produce oil also keeps costs down by keeping expensive machinery and equipment safe, and providing maintenance, repair and engineering space. In Mozambique, this is critical.

Benefits of logistics parks for gas companies in Mozambique

Mozambique generates more electricity than it consumes, and South Africa receives a large part of the excess energy because the surplus is exported from Mozambique. Apart from proven oil reserves, there is additional  untapped potential in the energy sector, with an estimated hydropower potential of 12,000 MW and large natural gas reserves as well. 

Proven and estimated Mozambican energy reserves present huge opportunities for gas companies. To efficiently reap the benefits, a central storage location is needed to assist with the intense resource and manpower needed to produce natural gas.

Logistics park features for gas companies

Offshore natural gas production requires a lot of specialized, heavy equipment. Cranes and hoisting systems, large engines, and pumps are commonly required. Logistics parks offer the amount of space necessary to store and maintain this kind of equipment, as well as the construction material for production platforms.

Pipes are essential in virtually any oil and gas project because they are used in underground wells, embedded in the sea floor and used to construct pipelines.  Seventy-five percent of South Africa’s natural gas is transported via pipelines. Logistics parks are crucial to natural gas production because they provide laydown yard space for all the pipes needed for transport.

Why should gas companies use logistics parks for storage and distribution?

One of the challenges that gas companies face is ensuring that the requirements of demand and supply are met in an effective way. This is especially difficult in parts of Africa that lack the storage infrastructure needed to meet the demand.

Logistics parks and Agility warehouses provide the solution with safe, secure storage for gas production equipment and ideal locations for easy access. Gas companies can use logistics parks for storage of all the large equipment, tools, chemicals and other material necessary to extract and transport gas.

Improving gas company efficiency

South Africa has historically relied on coal as the main energy source for the country (comprising about 80 percent of the energy mix) but is moving towards natural gas, which emits less CO2. One of the biggest challenges that gas companies face in using natural gas and liquid fuels efficiently lies in the complicated supply chain.

Logistics parks increase the efficiency of the supply chain by cutting out unnecessary transportation time. With gas extraction equipment and pipes all in a central location, there are fewer steps in the chain.

How logistics parks in Mozambique help foster growth in international markets

Logistics parks help foster economic growth in international markets in several ways. First, logistics parks provide more efficient access to roads and ports. This helps encourage growth as it reduces transportation and shipping costs. Lower costs and easier transportation access both increase the opportunity to expand globally.

Logistics parks greatly help to streamline the supply chain process. Costs for gas and oil companies are reduced by using move-in ready warehouses as these businesses don’t have to plan and build their own storage facility. By helping to save costs and increase efficiency, logistics parks can help organizations grow and compete with multinationals.

Benefits of central distribution hubs

Mozambique offers tremendous opportunities in the oil and gas industries but lacks the infrastructure that is needed to process and distribute products. Logistics parks help boost the infrastructure by serving as central distribution hubs. These hubs have the following benefits:

• Lowered storage costs
• Increased efficiency of warehouse organization
• Lowered transportation costs
• Increased readiness to distribute products

Poor infrastructure results in disconnected supply chains, and logistics parks mitigate that risk. Companies wishing to enter a new market in an area with poor infrastructure can utilize the benefits of Agility ready-built warehousing. In short, centralized distribution hubs increase accessibility for oil and gas companies.

Reducing the carbon footprint

Lowering the carbon footprint of multiple industries is a global responsibility. Carbon footprint reporting is particularly important in African countries as they have a high vulnerability to climate change. Finding a balance between economic growth from energy operations and conservation of natural resources is no easy task.

The world has long been dependent on coal, and that has greatly contributed to high levels of greenhouse gasses. Moving from coal to natural gas serves to protect and increase energy investments while also meeting environmental goals and regulations. Logistics parks provide support for the transition to natural gas by providing centralized storage sites to make natural gas supply chains more efficient.

Fostering economic growth

An investment in Mozambique logistics parks will help foster economic growth in the region by supporting the manufacturing and extractives industries. Investing in logistics parks will help to support job growth and economic expansion in Mozambique.

Finding the right logistics parks in Mozambique

What oil companies should look for in logistics parks

There are several features that crude oil companies should look for in logistics parks when considering an investment in Mozambique. Of utmost importance is the location because having a strategic location is one of the best advantages of logistics parks. The lower transportation costs and streamlined distribution opportunities hinge on the location. Agility’s logistics parks, for example, are all located near capital cities and major roads and rail networks, seaports, and airports.

Cities like Maputo check all the boxes for location. The gas and oil exploration sectors in the Cabo Delgado Province have driven demand for an increase in air transport. This means that the area will most likely see an expansion in air transportation options. Mozambique already has four large commercial ports, including Maputo. Mozambique also has a rail network from the Port of Maputo to South Africa.

There is an inherent risk in investing in emerging markets with capital costs and efficiently meeting the market demand. Agility’s logistics parks help mitigate those risks with unique advantages. Agility offers services and expertise such as increased warehouse security, climate-controlled storage, and over forty years of facilities maintenance experience.

What gas companies should look for in logistics parks

Like oil companies, gas companies should look for certain traits in a logistics park. Location, experience, and type of warehousing offered are important. In addition, gas companies may want to consider sustainably-built warehousing.

As the world grapples with climate change and many countries attempt to make a move away from fossil fuels to renewable energy sources, natural gas extraction has presented itself as a transitional solution. Finding a logistics park that uses eco-friendly materials and waste management services will further support the environmental goals of responsible gas companies.

Agility offers a green warehouse design with recycling zones, low-emitting paint, and regionally sourced building materials. Agility warehouses also lower energy costs and environmental impact through solar panels, skylights, and LED lighting.

Regulatory requirements

Compliance with regulatory requirements is of paramount importance with gas and oil companies. As regulations for the extraction and production of gas and oil change, companies may need additional storage space for special equipment needed to meet requirements.

Depending on the area, there may also be many regulations surrounding the safe storage of hazardous materials used in energy production. Chemicals, drilling mud, and hazardous goods need a secure storage site, and Agility Logistics Parks can meet that requirement.

Contact Agility to learn more about the experienced, international-standard Agility Logistics Park in Mozambique. See how Agility warehousing provides high-quality, sustainably designed logistics parks with strategic access to transportation networks.