Mozambique okays resumption of $20bn Cabo Delgado gas project

The project, in which TotalEnergies has an operational interest of 26.5%, was halted in 2021 due to increasing insecurity.

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

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

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 $20 billion LNG project in which TotalEnergies has a 26.5 percent stake.

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

TotalEnergies spokeswoman Stephanie Platat said a decision to restart the project depends on the guarantees of safety and human rights in Cabo Delgado and “a clear understanding of the costs of the project after a hiatus of more than two years – which should be maintained and not increased”. .

“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 get the expected certainty before considering a possible restart,” said Platat.

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

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

The chairman and general manager of the energy major, Patrick Pouyanne, visited Mozambique two months ago to meet Nyusi and review the security and humanitarian situation in Cabo Delgado.

Following Pouyanne’s visit, TotalEnergies announced the appointment of Jean-Christophe Rufin, a self-described expert in humanitarian action and human rights, to independently assess the situation in Cabo Delgado province.

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