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Mozambique Expects Decision by March on $20 Billion Gas Project Restart

Mozambique Expects Decision by March on $20 Billion Gas Project Restart

  • TotalEnergies froze project last year due to deadly raids
  • Mozambican economy to grow 5% in 2022, beating early forecasts

Bloomberg reports that Mozambique’s Finance Minister Max Tonela is “very optimistic” that TotalEnergies SE will make a decision by March to resume work on its $20 billion liquefied natural gas export project that Islamic State-linked violence put on hold.

“What Total has required is a long-term security assurance” and the government thinks the necessary conditions are in place, Tonela said in a Sept. 16 interview in Maputo, the southeast African nation’s capital. “Of course, they have to analyse and take a decision on their own.”

a d v e r t i s e m e n t

The Paris-based energy company evacuated all employees and declared force majeure on the development — one of Africa’s biggest private investments yet — after a major attack in March last year on the town of Palma that’s less than 10 kilometres (6.2 miles) away. While the arrival of troops from Rwanda and a regional bloc more than a year ago helped to beat back the insurgency, small-scale violence has continued in areas further away from the LNG project site on Mozambique’s northern coast.

The project could transform Mozambique’s $16 billion economy — the world’s third-poorest country measured by per-capita income — and offers an alternative gas source to European nations scrambling for supplies after Russia’s invasion of Ukraine. But it’s situated in an area where violence that started in 2017 has left at least 4,200 people dead and prompted nearly 1 million to flee their homes.

TotalEnergies said in June it would return to the site once it’s satisfied the northern Cabo Delgado province is secure. Further work needs to be done, including the restoration of government services in key towns hit by the conflict, Stephane Le Galles, the company’s director for the project, said at a conference in Maputo last week, adding “the direction is good.”

Tonela is “not so optimistic” that ExxonMobil Corp., which has an onshore gas export project that’s adjacent to TotalEnergies’s and is even bigger, will reach a long-awaited final investment decision in the near-term. Development plans for that project are being revised, including to allow for potential carbon capture and storage in the future.

Asked if he expected a final decision next year, Tonela said: “It’s not easy to assume.”

First Shipments

ExxonMobil continues to monitor the situation and timing of the project will be dependent on achieving a sustainable secure environment, Jos Evens, chairman of its local unit, said in a speech last week.

Eni SpA, the Italian oil and gas producer that operates the offshore project components in ExxonMobil’s consortium, is preparing to ship the first LNG cargo from a floating platform off Mozambique’s northern coastline. That should happen by the end of October, the minister said.

See Also

A second such facility that Eni is planning would be positive for Mozambique, according to Tonela, who was energy minister before being appointed to his current role in March.

“There will be no contradiction” between pushing ahead with a second floating natural gas production platform as well as the bigger onshore development, Tonela said. “We do have enough gas to allow both projects to go ahead.”

Mozambique’s economy will probably expand by about 5% this year versus a previous forecast of 2.9%, thanks to better performance from the tourism, extractive and agriculture industries, he said.



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