TotalEnergies’ $20 Billion Mozambique LNG Project Faces Delays Over Security and Financing

TotalEnergies’ $20 Billion Mozambique LNG Project Faces Delays Over Security and Financing

TotalEnergies has confirmed that its $20 billion Mozambique LNG project will miss the 2029 production target due to unresolved force majeure and ongoing security concerns in the region.

Initially, the company planned to lift force majeure and restart construction by late 2024, which would have facilitated production by 2029. However, delays in financing and security stabilization have extended the timeline.

A $4.7 billion loan from the US Export-Import Bank (Exim) remains unapproved since construction halted in 2021 following violent insurgencies in Cabo Delgado.

Despite being approved during Donald Trump’s presidency, the loan has stalled under Joe Biden’s administration, which has introduced restrictions on funding overseas oil and gas projects.

TotalEnergies CEO Patrick Pouyanne emphasized in October that force majeure can only be lifted once financing is secured.

Three export agencies, including Exim, are yet to reconfirm their commitments following renegotiations of restart costs.

Exim revealed in November that it is reassessing the loan package alongside other export credit agencies, delaying disbursements initially planned before the project freeze.

Meanwhile, a leadership transition at Exim, with three Trump-appointed senior officials taking office, is expected to take several weeks to finalize.

The Cabo Delgado region, plagued by an insurgency linked to Islamic State militants, saw construction come to a halt in 2021. While security has improved, TotalEnergies remains cautious about lifting force majeure.

A spokesperson for the company reiterated that restoring peace and lifting the force majeure remain top priorities. Partner Mitsui announced in December that preparations are underway to resume construction, following the renegotiation of contracts with suppliers and contractors.

Mozambique’s newly elected President Daniel Chapo, who took office last week, pledged to deploy military forces to secure the LNG project site. However, his administration faces significant political instability.

Protests over his disputed election victory have resulted in over 300 deaths since October 9, posing further challenges to stabilizing the region.

The Mozambique LNG project, where TotalEnergies holds a 26.5% stake, was expected to position the country as a leading liquefied natural gas exporter.

Despite current setbacks, improved regional security and contractor negotiations signal potential progress, though the timeline remains uncertain.

The project’s success hinges on securing financing, stabilizing the political environment, and ensuring long-term safety in Cabo Delgado.

Until these conditions are met, Mozambique’s ambitions to capitalize on its LNG reserves will remain on hold.

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