French energy giant TotalEnergies and its partners have lifted the force majeure on their $20 billion Mozambique LNG project, marking a major step forward after Islamist militant attacks halted construction four years ago.
A TotalEnergies press officer confirmed that official notice had been sent to the Mozambican government on Friday. However, the company noted that operations would not immediately resume, according to Reuters.
“Before fully relaunching the project, Mozambique’s council of ministers needs to approve an addendum to the plan of development,” the company said, adding that an updated budget and schedule must first receive government approval.
TotalEnergies, which operates the project and holds the largest stake, expects the 13 million metric-ton-per-year facility to begin production in 2029, roughly five years later than originally planned.
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Costs tied to security and the prolonged suspension have pushed the project’s price up by at least $4 billion, according to Indian shareholder Bharat Petroleum, which made the estimate last year.
Discussions between shareholders and the Mozambican government are ongoing to determine how these additional expenses will be shared.
Nearly 90% of the LNG output has already been contracted under long-term agreements, TotalEnergies said. Buyers include China’s CNOOC, France’s EDF, and British oil major Shell. A portion of the gas will also go to Mozambique’s state-owned energy firm ENH.
Mozambique’s vast offshore gas discoveries have attracted global investment, with companies such as Italy’s ENI and U.S. major ExxonMobil also holding stakes in the country.
The project’s restart, however, will test Mozambique’s ability to maintain political stability and security as it seeks to harness its energy resources.
Currently, the Mozambique LNG project is about 40% complete. Remaining construction will proceed in what TotalEnergies described as “containment mode,” meaning that workers will access the site only by air or sea for security reasons.
The ownership structure of the project includes TotalEnergies with 26.5%, Japan’s Mitsui with 20%, ENH with 15%, Bharat Petroleum with 10%, Oil India with 10%, ONGC Videsh with 10%, and Thailand’s PTTEP holding the remaining 8.5%.
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Image Credit: Business Day
