Oil company TotalEnergies, responsible for the Mozambique LNG Project underway in Area 1 of the Rovuma basin, has announced that it is moving forward with the expansion of the camp for 2,000 workers in Afungi, Palma district, Cabo Delgado province, northern Mozambique.
The information is contained in an expression of interest procedure for engineering and supply for the expansion of the camp, launched by CCS JV, a consortium contracted by the French multinational, which positions itself as a leader in onshore construction and as a community partner committed to safe working practices in Mozambique.
According to a publication by Lusa, the consultation, which runs until February 20, requires competitors to submit details of the design, acquisition, and delivery of two-story modular accommodation for a camp of 2,000 people.
“The intention is also to supply furniture, equipment, internal lighting, Internet, telecommunications, satellite television, drinking water, and wastewater collection at this camp,” it concluded.
In January, at an open ceremony, the President of the Republic, Daniel Chapo, and the CEO of TotalEnergies, Patrick Pouyanné, relaunched the Mozambique LNG Project after about five years of paralysis.
On that occasion, the Head of State clarified that the resumption of the project will have a direct and significant impact on job creation, both during the construction and operation phases, contributing to the revitalization of the labor market and the training of the national workforce.
“The restart of the Mozambique LNG Project opens up new and significant business opportunities for micro, small, and medium-sized enterprises, strengthening local content, economic inclusion, and the development of national value chains,” said Daniel Chapo.
He also highlighted the direct benefits for local communities, stressing that the integration of populations into supply chains is one of the central pillars of the project.
Extension of the project for another four and a half years
In November, the government decided to extend the concession period for the liquefied natural gas (LNG) megaproject by four and a half years, rejecting TotalEnergies’ initial proposal, which called for ten years.
The French oil company’s request came as compensation for losses accumulated during the four years of forced suspension of activities, estimated at $4.5 billion. The information is contained in a letter sent by Patrick Pouyanné to the President of the Republic, in which he also announced the decision to lift the “force majeure” clause, activated in 2021 following the armed attacks in Cabo Delgado.
According to a source quoted at the time by Lusa, a resolution was approved at a meeting of the Council of Ministers establishing the reinstatement of the suspended period of the LNG project due to “force majeure,” ensuring “the recounting of the 30-year development period and preserving, under the terms of the law, the elements of the initial development plan.”
The resolution also defined the “need to assess all expenses incurred during the ‘force majeure’ period with technical rigor and transparency, ensuring the protection of the public interest and contractual predictability through an independent audit, which includes the right to a hearing, before the final report is approved.”
Approval of conditions for safe resumption of activities
Last year, TotalEnergies considered that the safety conditions for the full resumption of the Mozambique LNG Project had been met. In a document, the concessionaire “respectfully” requested the Executive to authorize the extension of the Development and Production Period of the Golfinho-Atum field for an additional decade, emphasizing that such a measure would “partially offset the economic impact” caused by the prolonged interruption of operations.
The letter, released by the Lusa news agency, also mentioned the need to “optimize the financial obligations” of Empresa Nacional de Hidrocarbonetos (ENH), Mozambique’s state-owned partner in the consortium led by TotalEnergies.
As a final condition before relaunching the project, the concessionaire said it was awaiting government approval of an addendum to the Development Plan, which includes a revised budget and schedule. According to the oil company, the update reflects the additional costs incurred due to events classified as “force majeure,” totaling the aforementioned $4.5 billion.
Patrick Pouyanné recalled that between 2021 and 2024, the government conducted an audit of the financial consequences of the suspension, the report of which the company expects to receive “as soon as possible.”
According to the letter, the prolonged period of inactivity had a direct impact on the initiative’s schedule, postponing the first delivery of Liquefied Natural Gas to the Afungi facility, initially planned for July 2024, to the first half of 2029. As a result, the Development and Production Period will be extended by another four and a half years.
Information about Mozambique LNG
The Mozambique LNG project represents an investment of around US$20 billion and is considered the largest private venture currently underway in the country. Estimated production is 13 million tons per year of LNG, with development already at around 40%, according to data provided by TotalEnergies.
In addition to TotalEnergies, companies such as Japan’s Mitsui, Mozambique’s ENH, Thailand’s PTT, and India’s ONGC, Bharat Petroleum, and Oil India are participating in the consortium. The contractor responsible for construction is CCS JV, a consortium formed by Saipem, McDermott, and Chiyoda.
Mozambique has three approved development projects for the exploration of natural gas reserves in the Rovuma basin, ranked among the largest in the world, all located off the coast of Cabo Delgado province.
A study by the consulting firm Deloitte points out that Mozambique’s vast natural gas reserves could generate up to US$100 billion in revenue by 2040, making the country one of the world’s ten largest producers and responsible for 20% of Africa’s LNG production.
