The resumption of work on the liquefied natural gas (LNG) project led by TotalEnergies, in Cabo Delgado province, could serve as a catalyst for ExxonMobil’s final investment decision, valued at 30 billion dollars (1.9 trillion meticals), according to an analysis by financial rating agency Fitch Ratings.
‘The resumption of construction of the TotalEnergies project could facilitate the final investment decision (FID) on the mega-project proposed by ExxonMobil,’ reads the Fitch note. The new project, which will be partly onshore, is expected to contribute significantly to Mozambique’s economic growth during the construction phase.
With an estimated production capacity of 18 million tonnes per year (mtpa), ExxonMobil’s venture could become the largest LNG project ever undertaken in Mozambique, surpassing the 12.9 mtpa planned for the TotalEnergies project, whose production is scheduled to begin after 2030.
TotalEnergies, leader of the Area 1 consortium, is preparing to reactivate work that has been suspended since 2021, following the intensification of armed violence in Cabo Delgado, which led to the withdrawal of technical staff and the activation of the force majeure clause.
The resumption of the project is being boosted by the recent release of funding, namely the 4.7 billion dollar (300 billion meticals) credit approved by the US Exim Bank for the export of US goods and services to the Mozambique LNG project, under construction on the Afungi peninsula.
Meanwhile, ExxonMobil is moving ahead with preparatory work on its own project, having contracted last October a consortium led by the US company McDermott, which also includes the Italian company Saipem and the China Petroleum Engineering and Construction Corporation (CPECC), to carry out the Front End Engineering Design (FEED) – the technical design phase of the project.
According to ExxonMobil’s vice-president for external relations, Walter Kansteiner, the FEED phase is expected to be finalised within 12 to 13 months. The aim is for the final investment decision to be taken by the end of 2025, as reaffirmed by the company’s general manager in Mozambique, Arne Gibbs.
Gibbs emphasised that Rovuma LNG, the name of ExxonMobil’s project in Area 4, could become the largest liquefied natural gas project in Africa, and possibly the largest investment ever on the continent.
The Area 4 consortium is led by ExxonMobil, in partnership with Italy’s Eni and China’s CNPC, which together hold 70 per cent of the Exploration and Production Concession (EPCC).
Although the recent advances are interpreted as encouraging signs for the sector, Fitch warns of the persistence of security risks in Cabo Delgado, which could continue to condition the deadlines and execution of the projects.
Even so, TotalEnergies’ progress is seen as a positive milestone, capable of generating additional confidence among international investors and unlocking large-scale strategic investments.
Source: Lusa
