Mozambique President Urges Total LNG Restart Despite Risks

Mozambican President Daniel Chapo said his government and private companies will have to collectively ensure the necessary security is in place to enable TotalEnergies SE to restart construction of a $20 billion gas project that has stalled due to a militant insurgency — and even then risks will remain.

The project in the northern Cabo Delgado province along with others that are at earlier stages of development are seen as crucial to the future of the southern African nation, which ranks among the world’s poorest. The French oil major halted work, evacuated workers and declared force majeure in 2021 following an escalation in attacks by Islamic State-linked militants.

“Regarding security, it’s relatively stable compared to this past four years, but continuity of this stability doesn’t depend only on the government of the republic but on all partners in that area,” Chapo said in an interview with Bloomberg in Seville, Spain, on Tuesday. “If we’re waiting for Cabo Delgado to be a heaven, we won’t lift force majeure.” 

Total’s facility, which will take another four years to complete, will liquefy and export the extensive gas reserves off northeast Mozambique that were discovered 15 years ago. Since then, only one floating plant operated by Eni SpA has come on line. A final investment decision on a third planned venture, Exxon Mobil Corp.’s $27 billion Rovuma LNG project, is expected next year.

Mozambique called on nations in the region to help secure Cabo Delgado after its attempts to use mercenaries to halt the violence failed. 

Rwandan troops, brought in months after the attacks that led to Total’s evacuation, provided an effective response. The European Council gave the Rwanda Defence Force additional funding in November to help fight the insurgency, but the terms of its deployment remain uncertain.

“How long will depend a lot on security on the ground — it’s difficult to say tomorrow or later,” Chapo said. “Security doesn’t depend fully on Rwanda, Total or Mozambique, but on how terrorism” is playing out on the ground, he said. 

Repeated delays in restarting the project has meant that Total has had to renew financing agreements with some lenders. The US Export-Import Bank in March approved a $4.7 billion loan, the biggest funding component, a key milestone in ensuring a restart. 

While operations on the ground remain on hold, Total has continued engineering work and should be able to start LNG production by 2029, Chief Executive Officer Patrick Pouyanne said in an interview last month. 

Mozambique’s government wants work to resume “as quickly as possible” and is considering several options to maintain security, though none are guaranteed to work, according to Chapo. 

“We’ve got faith that TotalEnergies will be able to lift the force majeure” once adequate security is in place, he said. “I don’t have a date” because that will depend on Total, he added. 

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