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TotalEnergies to mull restarting US$20 billion Mozambique LNG project

Project – halted after guerrilla attacks – vital to east African republic’s economy, and would ease energy crunch in Europe following Russian supply squeeze.

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Project – halted after guerrilla attacks – vital to east African republic’s economy, and would ease energy crunch in Europe following Russian supply squeeze.

ARTICLE BY

PUBLISHED

READING TIME

Less than 1 minute Minutes

UPDATED: 22 Dec 2023, 12:32 am

TotalEnergies CEO Patrick Pouyanné is planning to visit Mozambique in the near future to assess conditions for restarting the company’s giant liquefied natural gas (LNG) project that was put on hold in 2021 because of Islamic State-linked violence, according to government officials. 

Pouyanné will travel to Cabo Delgado province, where the project is located, one of the officials told Bloomberg. 

It’s unclear if the integrated energy and petroleum company will announce plans to resume what was previously touted as Africa’s biggest private investment, costing at least US$20 billion. 

TotalEnergies, which is based in Paris, France, declined to comment. 

A recommencement of the project would come at a critical time for Mozambique, whose entire economy is estimated to be worth less than the construction cost of TotalEnergies’s LNG plant. 

Revenues from the project would be important to servicing its sole US$900 million Eurobond after government debt soared to more than 100 per cent of gross domestic product. 

The Mozambique LNG project could also play a key role in easing Europe’s energy crunch as Russia squeezes supplies. 

Encroaching rebel attacks in Mozambique at the end of 2020 prompted the company to evacuate staff from the site. In March 2021, as TotalEnergies announced plans to restart, rebels staged a major raid on Palma, the town closest to the development, leading the company to declare force majeure. 

The Mozambican government asked for military help from Rwanda and a regional bloc later that year to contain the insurgency. 

The security situation has since improved, especially along the coastal strip in the far north where the project is located. 

Pouyanné said a year ago during a trip to Maputo, Mozambique’s capital, that on his next visit, he would travel to Cabo Delgado to see if life had returned to normal to allow the project to resume.

 

UPDATED: 22 Dec 2023, 12:32 am

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