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Mozambique Plans City Catering to Offshore Natural-Gas Boom

July 23 (Bloomberg) -- Mozambique’s state petroleum company is building a port city to help develop the largest natural-gas discoveries in a decade off the southern African country.

The 18,000-hectare (44,500-acre) Palma development in the northern Cabo Delgado province will be next to liquefied natural gas facilities planned by Anadarko Petroleum Corp. and Eni SpA, Empresa Nacional de Hidrocarbonetos EP, said in a statement. It will feature residences, industry, stores, schools, hospitals, parks, farming and tourist attractions built through an ENH unit. Public hearings on the proposal were held today in Maputo, the capital, after sessions in Pemba and Palma, it said.

There are about 8,000 inhabitants in eight villages in the Palma area, and they “are satisfied with the project,” ENH said. “The proposed urban development plan was designed in a manner that will avoid the resettlement of these people.”

Mozambique may become the world’s third-largest gas producer in 2018 after companies such as Eni of Italy and Woodlands, Texas-based Anadarko begin output from reserves estimated at 250 trillion cubic feet. Proximity to gas-hungry India and the Far East is expected to spur investment and margins.

Tracus, a Maputo-based architectural company, started creating the urban development plan in August and the public consultation will help advance the strategy and draft proposal, ENH said.

15 Years

Construction of access roads and power lines will start immediately, while building of infrastructure in the industrial area will start in 2017, it said.

“It won’t be possible to execute this plan in 15 years,” Amad Valy, head of operations at ENHLogistics, said in the statement. “That’s the timeline indicated by the client, but the plan is very big. We believe that if we manage to achieve 25 percent of the plan in 15 years it would have been a success.”

A company known as Cabo Delgado Ports will invest $150 million initially and hold 30-year leases on ports in Pemba and Palma, Transport Minister Gabriel Muthisse said in January, according to website Club of Mozambique. The company is a joint venture between Cia Mocambicana de Hidrocarbonetos and Portos & Caminhos de Ferro de Mocambique, which are both state-owned.

Sasol Ltd., the world’s biggest producer of motor fuel from coal, said this month it’s considering a gas-to-liquids plant in Mozambique with Eni and ENH.

Eni alone will invest $50 billion in the country, Italian Premier Matteo Renzi said, according to news agency Ansa.

To contact the reporter on this story: Colin McClelland in Luanda at cmcclelland1@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Ana Monteiro, Alex Devine

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