TotalEnergies and its partners are preparing to resume construction on the $20 billion LNG export facility in Mozambique. This comes after the companies lifted a four-year-long force majeure on the project. A notice sent to the Mozambican government confirmed this development, as reported by a TotalEnergies press officer to Reuters.
The restart of the project is contingent on receiving approval from the Mozambican government, along with an updated budget and schedule. According to the TotalEnergies press office, “Before fully relaunching the project, Mozambique’s council of ministers needs to approve an addendum to the plan of development.”
Background and Delays
The LNG project, which is Africa’s largest foreign investment, was initially halted in 2021 due to escalating security concerns in the region. Located near the town of Palma in the Cabo Delgado province, the site has been affected by violence from Islamic State-affiliated militants. In response to attacks in the spring of 2021, TotalEnergies declared force majeure, effectively suspending all project activities.
Since then, TotalEnergies has awaited specific conditions to be met before making a decision on resuming construction. Originally, the aim for first LNG production was set for 2027. However, that timeline has since been pushed back to 2029. The anticipated restart of the project was initially planned for late 2024, but ongoing security issues and a disputed presidential election have contributed to further delays.
Financial Implications
The prolonged hiatus has likely led to significant cost increases. Estimates from Bharat Petroleum, a minority shareholder in the project, suggest that expenses may have risen by as much as $4 billion due to the delays. This financial impact underscores the complexities involved in large-scale energy projects, particularly in regions facing instability.
As TotalEnergies moves closer to resuming work, the focus will now shift to navigating the necessary governmental approvals and ensuring the safety of personnel involved in the construction. The restart of the Mozambique LNG project could potentially revitalize economic growth in the region and deliver significant energy resources to global markets.
