French oil company TotalEnergies, which leads the Area 1 block, located in deep waters in the Rovuma basin, one of East Africa’s largest offshore gas discoveries, has announced that it has secured 80 per cent of the financing package, or a total of 14 billion dollars, to support the restart of liquefied natural gas (LNG) exploration and production activities.
The estimated US$20 billion project is based in the Palma district, Cabo Delgado province, northern Mozambique, and has faced delays due to concerns about violent unrest in the region, provoked by terrorist groups since 2017.
Cited by Reuters, the company’s CEO, Patrick Pouyanné, assured that progress has been made on security, guaranteeing that the financiers have confirmed their willingness to move forward with the project.
‘Nearly 80 per cent of the $14 billion financing package underpinning the project has been confirmed by the lenders. We’re waiting for the green light from three credit agencies, some of which are in Western countries where the rules on gas have changed. So as soon as everything is in place, we’ll go ahead,’ he clarified.
Speaking at a press conference, he announced that he would soon be meeting with the new President of Mozambique, elected in the next general elections to be held on 9 October, to discuss some details of the LNG project.
‘The project remains profitable, we remain committed,’ Pouyanné said in a communication to investors, after TotalEnergies and APA Corp from the US announced a positive investment decision for Suriname’s most promising oil and gas project.
In July, the International Monetary Fund (IMF) estimated that TotalEnergies’ liquefied natural gas megaproject would begin work this year, with first exports expected within the next four years.
At the time, the financial institution recalled that, ‘with a view to improving security in the north, the French oil company carried out an assessment of the human rights situation in May 2023 and developed an action plan that establishes a basis for local socio-economic development’.
The Fund maintained that although the company had not yet announced the official resumption of the development phase, this was expected to take place soon, once the project’s funding had been secured.
Mozambique has three development projects approved to exploit the natural gas reserves in the Rovuma basin, which are classified among the largest in the world and are 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.
One is led by TotalEnergies (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).
