TotalEnergies Says Mozambique LNG Now Needs Extra $4.5 Billion After Four Year Halt
TotalEnergies has informed Mozambique that the cost of its liquefied natural gas (LNG) project has increased by $4.5 billion due to a four-year halt triggered by Islamist militant attacks.
TotalEnergies has informed Mozambique that the cost of its liquefied natural gas (LNG) project has increased by $4.5 billion due to a four-year halt triggered by Islamist militant attacks.
The oil giant is now seeking a 10-year extension to its production agreement, according to a letter from CEO Patrick Pouyanné.
The French energy major and its partners confirmed on Saturday that they have officially lifted force majeure on the multi-billion-dollar project, originally expected to cost about $20 billion, Reuters reported.
However, construction can only resume once Mozambique’s Council of Ministers approves a revised budget and timeline.
Pouyanné’s letter, dated Oct. 24, said the shutdown has pushed the first LNG delivery to the first half of 2029, nearly five years later than the initial July 2024 target.
To offset the financial impact, TotalEnergies is requesting that the government extend the Golfinho-Atum development and production period by a decade.
The project has the potential to transform the economy of one of the world’s poorest nations. Yet security risks remain a major threat.
This comes even as Mozambique LNG reactivates key work streams, including the reinstatement of U.S. financing and the remobilisation of contractors.
Mozambique’s energy regulator is conducting its own review of the additional costs and hasn’t indicated when it will be completed.
The project is currently approximately 40% complete, although security risks remain heightened in the region, despite a new pact with Rwanda to support counter-insurgency efforts.
Until conditions improve, remaining construction will continue in “containment mode,” with personnel only able to access the site by sea or air, TotalEnergies told investors in late September.
The Mozambique LNG venture is owned by TotalEnergies (26.5%), Japan’s Mitsui (20%), state-owned ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%), and Thailand’s PTTEP (8.5%). Exxon Mobil is developing a separate LNG project nearby.
