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Mozambique’s President Leads Efforts to Restart LNG Project Amid Cost Challenges

Mozambique’s President Leads Efforts to Restart LNG Project Amid Cost Challenges

Mozambique Government and industry collaborate on measures taken to address cost challenges.

Mozambique is making strides toward revitalizing its natural gas project in the northern province of Cabo Delgado.

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

In February 2023, Nyusi met with Patrick Pouyanné, CEO of TOTALENERGIES, in Pemba to discuss the project’s prospects. While progress has been made in ensuring regional stability and security, the main hurdle lies in the revised cost structure advocated by the main contractors involved in both onshore and offshore operations.

Recognizing the project’s importance, Nyusi has mobilized government officials to address the situation and seek a resolution with contractors to kickstart the project promptly. Last April, Mozambique’s Minister of Mineral Resources and Energy, Carlos Zacarias, held a pivotal meeting in Maputo with representatives from key contractors and subcontractors, alongside ENH and TOTALENERGIES.

The approach, led by the President, demonstrates the government’s support for the project operator during negotiations, with a focus on achieving cost agreements promptly to adhere to established timelines. As a result, the project operator has identified selected cost elements and plans to relaunch some tenders for packages outside the scope of the primary contractors.

Reviving the LNG project is a significant opportunity for Mozambique, attracting investment, creating jobs, and establishing a foothold in the global LNG market. With renewed momentum partially due to the market volatility created by the Ukrainian conflict, Mozambique is looking to see the project resumption and to build on investor confidence, leading to further develop its economy.

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With the recent ramp-up of ENI’s Coral South FLNG platform late last year, Mozambique’s aspiration to become a key player in the LNG market is looking more like a close reality and, the collaborative approach taken to address cost challenges is a testament to the nation’s commitment to this goal.

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