TotalEnergies and its joint venture partners are preparing to restart construction on the $20 billion liquefied natural gas (LNG) export facility in Mozambique. The companies lifted a four-year-long force majeure on the project, as confirmed by a press officer from TotalEnergies. This pivotal decision follows a notice sent to the Mozambican government, marking a significant step towards reviving one of Africa’s largest foreign investments.
Project Resumption Depends on Government Approval
The resumption of construction and engineering work hinges on receiving approval from Mozambique’s council of ministers for an updated development plan. According to TotalEnergies’ press office, an addendum to the original plan must be finalized before the project can fully relaunch.
The Mozambique LNG project, which is situated near the town of Palma in Cabo Delgado province, was initially halted in 2021 due to escalating security concerns. The area has faced violent attacks from Islamic State-affiliated militants, prompting TotalEnergies to declare force majeure and suspend operations. This decision came in response to a series of Islamist militant attacks that raised serious safety issues for workers and operations.
Since the suspension, TotalEnergies has awaited the fulfillment of several conditions to determine the feasibility of resuming work. The goal for first LNG production has been pushed back from an initial target of 2027 to 2029, reflecting ongoing challenges in the region. Initially, the company intended to restart operations by the end of 2024, but plans have faced delays due to the political instability surrounding Mozambique’s disputed presidential election and continued violence in the area.
Financial Implications of Delays
The four-year hiatus has not only stalled the project but also increased its costs significantly. Bharat Petroleum, a minority shareholder in the project, estimated last year that the delays could raise expenses by as much as $4 billion. The rising costs highlight the financial impact of the prolonged security issues and the subsequent suspension of work.
Despite these challenges, the recent lifting of the force majeure signals a potential turning point for the Mozambique LNG project. As TotalEnergies and its partners move closer to resuming operations, the focus now shifts to securing necessary government approvals and finalizing budget and scheduling details.
The resumption of this project is critical not only for TotalEnergies but also for Mozambique’s economic landscape, as it promises to bring significant foreign investment and job opportunities to the region. The ongoing developments in Cabo Delgado will be closely monitored by stakeholders as the situation evolves.
