TotalEnergies and its partners have lifted the force majeure on the $20 billion Mozambique LNG project
French oil company TotalEnergies (TTEF.PA), starts new tab, said that it and its project partners had lifted the “force majeure” on their $20 billion Mozambique LNG project. This comes four years after an attack by some Islamist militants stopped work on the project.
A TotalEnergies press officer said that the Mozambican government was sent notice by letter on Friday.
The company did say that the project would start up again, but only after the government cleared a new budget and schedule.
“Before fully relaunching the project, Mozambique’s council of ministers needs to approve an addendum to the plan of development,” the firm said.
TotalEnergies, which runs the project and has the biggest stake in it, thinks that the 13 million metric tons-per-year plant will be ready in 2029, which is about five years later than what was first thought.
AT LEAST $4 BILLION MORE EXPENSES?
Indian partner Bharat Petroleum said last year that security costs and the four-year break had added at least $4 billion to the project’s $20 billion price tag. There have been talks between shareholders and the Mozambique government about how to split the extra costs.
TotalEnergies says that deals have been made to sell almost 90% of the project’s future output. Long-term buyers include China’s CNOOC, France’s EDF, and Britain’s Shell (SHEL.L), opens new tab. A certain amount of the gas is set aside for ENH, Mozambique’s state energy company.
Investors were drawn to Mozambique because of large gas discoveries off the coast. Companies like Italy’s ENI (ENI.MI) and the US’s ExxonMobil (XOM.N) have stakes in the country. Now that the project is back up and running, it will be important to see if Mozambique can provide the political stability and safety needed to use those reserves.
The project, which is called Mozambique LNG, is 40% done. It will be in “containment mode” for the rest of the work, and workers will only be able to come in by air or sea for safety reasons, TotalEnergies said at an Investor Day on September 29.
TotalEnergies (26.5%), Mitsui (20%), ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%), and PTTEP (8.5%) all own a piece of Mozambique LNG.
