Four years after suspending operations amid an Islamist insurgency, French giant TotalEnergies is ready to restart its Mozambique LNG megaproject, reports the Financial Times.
The French energy giant sent a letter to Mozambican President Daniel Chapo informing him of their decision to lift the force majeure pause, invoked in April 2021 after a brutal terrorist attack on Palma district impacted onshore facilities.
It cited security assurances provided by Chapo, including an agreement signed last August that ensures the continued presence of Rwandan forces in Cabo Delgado during the project’s construction period, in meeting the necessary safety conditions to resume activities.
Preliminary work to restart the US$20 billion liquified natural gas (LNG) project has already been underway for months, Total CEO Patrick Pouyanné insisting that the security situation had improved and the consortium was eager to get the project back on track.
It now falls to the Mozambican government to decide if it is willing to approve the changes to the budget, project timeline and concession timeline requested by Total.
[See more: US loans US$4.7 billion to Mozambique LNG project described as a ‘carbon bomb’]
The Total-led consortium “respectfully” requested a 10-year extension to its gas concession to compensate for an estimated US$4.5 billion in losses caused by the suspension.
They also noted that the “prolonged period of suspension” had significantly altered the project’s schedule, which had anticipated the first shipments of gas beginning in July 2024. Now the consortium expects to begin shipping LNG in the first half of 2029.
Pouyanné also asked the government to approve an additional US$4.5 billion in costs. The letter did not specify who would cover the costs, but a person familiar with the situation told the FT that costs could be shared across developers of the project. Moving forward with Mozambique LNG will also affect ExxonMobil, which has delayed making a final investment decision (FID) on its US$30 billion Rovuma LNG project.
Chapo is visiting the US this week, where he’s likely to find support for restarting the LNG project. Where the UK government has been looking to pull out of its US$1.15 billion investment in the scheme, the US loaned US$4.7 billion in May of this year.
