The Mozambican government and the Anglo-Dutch oil company Shell have signed a Memorandum of Understanding (MoU) on the allocation of natural gas from the Rovuma Basin for domestic use, APA News reported.

The MoU was finalized in late June by the Mozambican Mineral Resources and Energy Minister, Leticia Klemens, and Shell’s Vice President, Clare Harris, following a public tender for the production of gas for domestic use, according to NSNBC International.

Among the three winning bids was one from Shell-Mozambique, which requested between 310 and 330mcf/d of natural gas in order to produce 38,000 barrels of liquid fuels, including diesel, naphta, and kerosene, and to produce 50 to 80 MW of electricity.

The agreement is considered as an important step in implementing Mozambique’s gas master plan, which is intended to diversity the industrialization of the country, based on the enormous reserves of gas in the Rovuma Basin.

At the signing ceremony, Klemens noted that “a key aim of the government’s strategy for the sector is to ensure that the country’s development needs can be met through using natural gas in Mozambican industries.”

Meanwhile, Harris said that she believed the signing of the MoU marked an important step towards developing the project, more specifically, in the energy sector and in the domestic gas industry.