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Patrick Pouyanne: “Mozambique LNG Restart is Not a Matter of Costs”

Patrick Pouyanne: “Mozambique LNG Restart is Not a Matter of Costs”

The French company TotalEnergies, leader of the “Mozambique LNG” project, has announced that it has obtained good results from discussions with the contractors, who have agreed not to inflate the costs of the contracts for the construction of the natural gas production and exploration centre in Cabo Delgado province, northern Mozambique.

According to the oil company’s CEO, Patrick Pouyanne, he will soon be meeting with the head of state, Filipe Nyusi, to discuss security in the country and the resumption of activities interrupted by the terrorist attacks.

Quoted in a report published on Monday (29) by the LNG Prime news platform, he explained that the restart of the project is not a question of “cost”, but of security, emphasising that everything is aligned so that work can begin again soon.

“We had a good discussion with the contractors. So the good news I can confirm is that we’ve actually come back and we have good contracts with everyone. We’ve realigned all the contractors because it’s in both parties’ interests to carry out the project,” he emphasised.

With regard to security, Pouyanne said that there is a good, strong and resilient concept. “There has been a lot of progress, and Cabo Delgado province is well controlled, there have been no incidents or extreme events. I’ll be with President Nyusi soon to analyse more issues.”

Regarding the suspension of ‘force majeure’, the leader reiterated: “We will do this in the right order. However, the first thing to be done by the Mozambican government, which is responsible for sovereignty and security, is to tell us the real situation. This is the country’s duty, and we are working together.”

In February, Patrick Pouyanné said during the presentation of the 2023 results that the company hoped to restart activities in the Rovuma basin by the end of this year.

Speaking in London, England, he explained that his company is monitoring the entire scenario in order to avoid a forced return.

“We are monitoring the terrain, the civilian population is already back and we can see a certain normality. There are some unresolved engineering issues, but I hope to restart the project by the end of the year. What we don’t want to happen is to make people return to Cabo Delgado and then force them to leave, which would be very complex,” he clarified.

Pouyanné also emphasised that TotalEnergies has made progress with suppliers and different contractors, who are interested in reactivating the project.

“We’re mobilising the contractors again and we’re not far away from having everything ready to return to Mozambique and restart the work. Now we need to reactivate the financial institutions around the world,” he said.

The Area 1 block, located in deep waters in the Rovuma basin, is one of the largest offshore gas discoveries in East Africa.

TotalEnergies EP Mozambique Area 1 holds a 26.5 per cent stake in the project, alongside ENH Rovuma Area 1, with 15 per cent, Mitsui E&P Mozambique Area 1, with 20 per cent, ONGC Videsh Rovuma, Beas Rovuma Energy Mozambique and BPRL Ventures Mozambique, all three with 10 per cent each, and PTTEP Mozambique Area 1, with 8.5 per cent.

Mozambique has three development projects approved to exploit the natural gas reserves in the Rovuma basin, classified as among the largest in the world, all located off the coast of Cabo Delgado province.

Two of these projects are larger and involve channelling the gas from the seabed to land, cooling it in a factory and then exporting it by sea in a liquid state.

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“We had a good discussion with the contractors. So the good news I can confirm is that we’ve actually come back and have good contracts with everyone. We have realigned all the contractors because it is in the interests of both parties to carry out the project”

One is led by TotalEnergies (the Area 1 consortium) and work progressed until it was suspended indefinitely following the armed attack on Palma in March 2021, when the French energy company declared that it would only resume work when the area was safe. The other is the still unannounced investment led by ExxonMobil and Eni (Area 4 consortium).

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