TotalEnergies, the French oil and gas giant, intends to resume operations at the Area 1 liquefied natural gas (LNG) project in Mozambique’s Rovuma Basin as early as January 2024, if security conditions permit, the BNN Network news portal reported on Monday, November 13.
Without providing more specific information on the subject, the website, which quotes the director-general of the French multinational, Patrick Pouyanné, says that the relaunch will depend on the re-establishment of peace and stability in Cabo Delgado province and the provision of adequate security measures by the Mozambican authorities and regional forces.
Patrick Pouyanne, quoted by the portal, also said that the company is working on the basis of a revised budget and timetable for the project, which will be announced in due course in 2023.
After the Mozambican government, together with regional blocs such as the Southern African Development Community (SADC) and the Rwandan government, sent troops and resources to fight the insurgency and protect the LNG areas in Afungi, the military intervention has been having an effect and the militants have regained control of several strategic locations, including Palma. The Mozambican government has also shown its commitment and support for the project by guaranteeing cooperation and collaboration to TotalEnergies and its partners.
As we know, the French major decided to suspend the project in April 2021, following a violent attack by Islamic militants on the town of Palma, near the project site. The attack, which was claimed by the Islamic State-affiliated Al-Shabaab group, killed dozens of people and displaced thousands of others. The attack also disrupted the project’s supply chain and logistics and raised serious concerns about the safety of workers and facilities.
The suspension of the project was a major setback for TotalEnergies and its partners, as well as for the government and local communities. The project was initially scheduled to start production in 2023, but the suspension has delayed the timetable and increased costs.
The suspension has also affected the confidence and attractiveness of the Mozambican energy sector, which has been hit by the covid-19 pandemic, low oil prices and political instability.
The Mozambique LNG project is one of the largest in Africa, with an estimated cost of 20 billion dollars and a production capacity of 12.9 million tons per year. It involves the development of offshore gas fields in the Rovuma basin and the construction of an onshore LNG plant and export terminal on the Afungi Peninsula. The project is expected to generate significant revenues and benefits for the Mozambican economy and people, and to contribute to global energy transition and security.
TotalEnergies is the operator and largest shareholder in the project, with a 26.5% stake. The other partners include the Mozambican public company ENH, the Japanese company Mitsui, the Thai company PTTEP and the Indian companies ONGC Videsh, Bharat Petroleum and Oil India. The project has secured long-term contracts with buyers in Asia and Europe, such as the China National Offshore Oil Corporation, Tokyo Gas, Centrica and Shell.