Eni's Mozambique Play: LNG Growth, Agribusiness Diversification, and the Path to Strategic Value Creation

Eni's decades-long commitment to Mozambique—rooted in its 19-year exploration of the Rovuma Basin's 2,400 billion cubic meters (bcm) of natural gas reserves—is now reaching a pivotal stage. With the Coral North FLNG project poised to add 3.55 million tonnes per annum (mtpa) of LNG production capacity, and a 150,000-hectare agribusiness initiative promising 120,000+ jobs, Eni is positioning itself as a leader in resource diversification for high-GDP-growth economies. This strategic duality—combining energy dominance with sustainable agricultural development—could unlock long-term upside in both energy and biofuel sectors, while mitigating risks tied to volatile commodity cycles. Here's why investors should take note.

Coral North FLNG: LNG Growth and GDP Catalyst

The Coral North FLNG, with its 3.55 mtpa capacity, is the next chapter in Eni's Rovuma Basin ambitions. While delays in securing financing from climate-conscious banks and legal challenges linger, the project's government-approved development plan (April 2025) underscores Mozambique's economic reliance on gas. The Coral South FLNG, operational since 2022, already contributed 50% of Mozambique's GDP growth in 2023 and is projected to drive 70% of 2024's GDP growth, according to the IMF. Coral North, once operational by Q2 2028, will amplify this impact, potentially lifting Mozambique's LNG exports to 6.95 mtpa and solidifying its status as a top-tier producer.

However, the project's success hinges on navigating headwinds: flaring emissions from Coral South exceeded original environmental assessments by sevenfold, triggering lawsuits and bank withdrawals. Investors should monitor Eni's progress in securing financing—likely via multilateral agencies or sovereign-backed loans—and its ability to align with Mozambique's 2030 carbon neutrality pledge, including commitments to supply 25% of Coral North's gas to domestic markets for power generation.

Agribusiness: Diversification Beyond Fossil Fuels

Eni's agribusiness venture—a 150,000-hectare initiative focused on non-food crops like jatropha and palm oil for biorefining—adds critical diversification. By targeting crops that don't compete with food production, Eni avoids ethical pitfalls while creating 120,000+ rural jobs. This aligns with Mozambique's goals to reduce poverty and industrialize its economy, leveraging Eni's expertise in large-scale project management. The initiative also ties into global decarbonization trends: biofuels could meet 6-8% of global aviation fuel demand by 2030, per the International Energy Agency, offering a marketable hedge against gas demand volatility.

Sustainability and Governance Risks

Despite its potential, Eni's Mozambique strategy faces hurdles. Sovereign risks—such as fiscal mismanagement and corruption—are highlighted by reported embezzlement of gas revenues (e.g., $33 million diverted in 2023)—while environmental groups critique the cumulative impact of flaring and coastal ecosystem disruption. Investors should demand transparency on Eni's carbon offset programs, including its $1.2 billion clean cooking initiative and REDD+ projects, which aim to neutralize 10% of the project's emissions by 2030.

Investment Case: Positioning for High-Growth Economies and Decarbonization

Eni's Mozambique ventures offer a compelling risk-reward trade:
- Upside: Coral North's 30-year lifespan and Mozambique's projected 6% annual GDP growth (2025–2030) provide a leveraged exposure to high-growth markets.
- Diversification: Agribusiness and biofuels reduce reliance on gas alone, while aligning with ESG trends.
- Valuation: At a P/E ratio of 7.5x (vs. sector average of 12x), Eni remains undervalued despite its asset-rich position in Mozambique.

Recommendation: Buy ENI stock for a 12–18-month horizon, targeting a 20%+ return as Coral North nears FID and agribusiness revenues materialize. Pair this with short-term downside protection via options, given near-term risks like financing delays or political instability.

Conclusion

Eni's dual focus on LNG and agribusiness in Mozambique exemplifies strategic value creation in two critical sectors: energy transition and sustainable economic development. While risks remain, the scale of Eni's operations—backed by a government eager to monetize its gas reserves—suggests the rewards could outweigh the hurdles. For investors seeking exposure to high-GDP-growth economies and decarbonization plays, Eni's Mozambique pivot is a bold bet worth considering.