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Home Energy

Mozambique expects decision by March on US$20B gas project restart

FurtherAfrica by FurtherAfrica
September 20, 2022
in Africa, Commodities, Energy, FID, Gas, Mozambique
Reading Time: 3 mins read
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Mozambique’s commitment to the climate agenda is unequivocal – Minister

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 analyze and take a decision on their own.”

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 kilometers (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.

Also read: Mozambique calls on energy giants to resume gas works

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.

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.

Related

Source: Bloomberg
Tags: Cabo DelgadocommoditiesExxonExxon MobilFeatureLNGMax TonelaMozambiqueMozambique expects decision by March on US$20B gas project restartMozambique Minister of Economy and FinanceNatural GasStephane Le GallesTotalEnergiesTotalEnergies SEмозамбикموزمبيقモザンビーク莫桑比克
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Founded in 2015 FurtherAfrica is an online platform centralising news and content focusing on the development and growth story of the African continent.

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