The president of the Mozambican National Institute of Petroleum (INP) said yesterday that the banks financing Total’s gas project, as well as its customers believe in the viability of the deal despite the suspension of the venture, due to armed violence.
Total “discussed with the financiers [about the suspension of the natural gas project] and everyone believes there is room to overcome this situation,” said Carlos Zacarias, in an interview with public broadcaster Rádio Moçambique.
Zacarias said that customers of liquefied natural gas also continue to believe in the viability of the business.
Insisting on the year 2024 as the start date for the production of liquefied natural gas for the Total project – even with the project now stopping indefinitely – the president of the oil sector regulator noted that “adjustments” and stress management interventions will be needed to stabilise the situation.
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Carlos Zacarias warned of the possibility of increasing the cost of financing the natural gas project in view of the serious situation generated by the March 24 attacks on the village of Palma, Cabo Delgado province, northern Mozambique, about six kilometers from the complex industrial which is under construction for the production of natural gas.
The president of INP said that the force majeure clause invoked by Total to cancel contracts with companies providing goods and services to the natural gas enterprise does not bind the Mozambican government, because it was not triggered within the framework of the link between the French multinational and the executive.
“The force majeure [invoked by Total] is not in relation to the State, it is between Total’s own consortium and some of the contracted companies”, he underlined.
Carlos Zacarias emphasized that the invocation of the force majeure clause has a maximum duration of 360 days, after which the situation will be reassessed.