The President of the Republic, Daniel Francisco Chapo, will preside over the ceremony to relaunch the Mozambique LNG Project, led by French multinational TotalEnergies, on Thursday, January 29, in Afungi, Palma district, Cabo Delgado province, after nearly five years of paralysis, the Presidency of the Republic said in a statement.
According to the document, the event will be attended by TotalEnergies CEO Patrick Pouyanné and marks a moment considered strategic for the national economy, reaffirming the confidence of international partners in Mozambique’s energy, institutional, and human potential.
Quoted in the statement, the head of state explains that the resumption of the project will have a direct and significant impact on job creation, both in 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 relevant business opportunities for micro, small, and medium-sized enterprises, strengthening local content, economic inclusion, and the development of national value chains,” said Daniel Chapo.
The minister also highlighted the direct benefits for local communities, emphasizing that integrating local populations into supply chains is one of the central pillars of the project.
Project extended 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 requested 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 the company’s chief executive, Patrick Pouyanné, to the President of the Republic, Daniel Chapo, in which the decision to lift the “force majeure” clause, activated in 2021 following the armed attacks in Cabo Delgado, was also announced.
According to a source quoted at the time by Lusa, a resolution was approved at a meeting of the Council of Ministers which, “in accordance with current regulations, establishes the reinstatement of the suspended period of the LNG project due to ‘force majeure’, guaranteeing 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 defines the “need to assess all expenses incurred during the period of ‘force majeure’ 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 fair 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 the National Hydrocarbons Company (ENH), Mozambique’s state 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 (LNG) 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 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.
