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TotalEnergies Reviews all its Options in Cabo Delgado

TotalEnergies Reviews all its Options in Cabo Delgado

The French major and the Mozambican authorities are indicating that investments may resume in the conflict-ridden province in 2022, but the nature of the operations there could change radically.

Deploy several floating liquefied natural gas (FLNG) facilities? Move the land-based LNG trains further south? TotalEnergies’ contractors on the Mozambique LNG project just can’t make up their minds. Engineers at the French major are studying every possible option for developing the substantial reserves of liquefied natural gas contained at Block 1 off the coast of Cabo Delgado province.

a d v e r t i s e m e n t

Initially, TotalEnergies’ two trains, with a total capacity of 12.9 million tonnes, were to to have been installed on the Afungi peninsula not far from the town of Palma, and indeed the company still hopes to return to Afungi, the zone having already been clearly demarcated following the departure of the local population.

Second and last chance

However, since December 2020 its construction works have been suspended on account of attacks by Islamist armed groups. With the arrival in July of Rwandan and Southern African Development Community (SADC) troops, security in the region has started to improve but this is no guarantee that the project will survive unscathed – costs have rocketed because all the French major’s contractors have had to be stood down. If the company does decide to relaunch operations, it can’t afford to fail because in so doing it would forfeit all hope of future investment.

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Much of the discussion at the recent COP26 in Glasgow, Scotland, was devoted to ceasing funding for the oil and gas sector, and indeed France has pledged to no longer finance upstream projects as of 2022. TotalEnergies is hoping that its trains in Mozambique will dodge the bullets of this new environmentally friendly financing ethos adopted by certain Western nations. But if it can’t get its operations up and running again next year, the fear is that some financiers will bail out in order to respect their international engagements.

Contacted by Africa Intelligence, the company asserted that “as operator, TotalEnergies EP Mozambique has studied all the best technical solutions available to enhance safety, reduce costs and reduce GHG emissions”.

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