KEY POINTS
- TotalEnergies and partners have lifted force majeure on the stalled Mozambique LNG project.
- Construction was halted in 2021 after Islamist insurgents attacked nearby towns in Cabo Delgado.
- The project’s cost has ballooned by at least $4 billion due to delays and security expenses.
French energy giant TotalEnergies has officially lifted the force majeure order on its $20 billion Mozambique liquefied natural gas (LNG) project, marking a cautious but significant step towards resuming one of Africa’s most ambitious energy ventures.
The decision, taken jointly with project partners and communicated to the Mozambican government on Friday, comes four years after a violent insurgency in the northern province of Cabo Delgado forced the company to evacuate staff and suspend all construction work.
The Paris-based oil major confirmed that the project’s revival remains contingent on government approval of an updated development plan, which includes a revised budget and construction schedule.
“Before fully relaunching the project, Mozambique’s council of ministers needs to approve an addendum to the plan of development,” a TotalEnergies spokesperson said.
The Mozambique LNG project, expected to produce around 13 million metric tonnes of LNG annually, is now projected to come onstream in 2029, roughly five years later than initially planned.
Costs Surge, Security Still a Concern
The long hiatus and heightened security costs have inflated the project’s original $20 billion budget by at least $4 billion, according to Indian partner Bharat Petroleum, which disclosed the revised figure last year.
Negotiations are ongoing between shareholders and the government in Maputo to determine how the extra expenses will be shared.
Contracts are already in place to sell nearly 90% of the project’s future output, with buyers including China’s CNOOC, France’s EDF, and Shell. Mozambique’s state-owned ENH will also receive a domestic allocation from the gas output, a move seen as key to ensuring local energy security.
The lifting of force majeure, while widely welcomed by investors, will again place the spotlight on Mozambique’s ability to maintain long-term stability in its restive north, where Islamist militants linked to the Islamic State continue to pose sporadic threats.
