Mozambique okays resumption of $20bn Cabo Delgado gas project

The project, in which TotalEnergies owns an operating stake of 26.5%, was halted in 2021 due to mounting insecurity.

Cabo Delgado district, Mozambique
Cabo Delgado district, Mozambique

Mozambique President Filipe Nyusi has said it is safe to restart the Cabo Delgado liquefied natural gas (LNG) project that was halted in April 2021 after rebel attacks on civilians.

Nyusi told a mining and energy conference in Maputo on Wednesday that Mozambique wanted to take advantage of the current high prices of LNG and the global shift towards cleaner sources of energy.

Violence by armed groups affiliated with ISIL (ISIS) in the northern Mozambican province has claimed thousands of lives since 2017, disrupting multibillion-dollar investments, including the $20bn LNG project in which TotalEnergies has a 26.5 percent stake.

“The working environment and security in northern Mozambique makes it possible for Total to resume its activities any time,” Nyusi said.

TotalEnergies spokesperson Stephanie Platat said a decision to restart the project depended on assurances of security and human rights in Cabo Delgado and “a clear vision of the costs of the project after an interruption of more than two years – which must be maintained and not increase”.

“The restart is a decision of Mozambique LNG, not a decision of TotalEnergies, which only owns 26.5 percent of the project. Given the context, the decision will have to be unanimous and TotalEnergies’ position is that it is appropriate to take the time to have the expected assurances before considering a possible restart,” Platat said.

The French oil company bought an operating stake in the project for $3.9bn in 2019. Delays in the project had caused the International Monetary Fund to scale back its economic growth forecasts for the nation.

In February, TotalEnergies said the situation in Cabo Delgado had “improved significantly” after African countries deployed troops to help Mozambique security forces deal with the armed uprising in 2021.

The energy major’s Chairman and Chief Executive Patrick Pouyanne visited Mozambique two months ago to meet Nyusi and review the security and humanitarian situation in Cabo Delgado.

After Pouyanne’s visit, TotalEnergies announced the appointment of Jean-Christophe Rufin, who it said was an expert in humanitarian action and human rights, to independently assess the situation in Cabo Delgado province.

This assessment would help TotalEnergies and its partners to decide if the conditions were right to resume the project.

Source: Al Jazeera and news agencies