Mozambique on Verge of Sealing $20 Billion LNG Project Revival Deal
In a major development that could transform one of the world’s poorest economies, Mozambican President Daniel Chapo announced that his government expects to finalize negotiations with TotalEnergies within weeks to restart the massive $20 billion natural gas project that was suspended four years ago due to insurgency threats.
The high-stakes talks reached a critical juncture after Chapo’s meeting with TotalEnergies CEO Patrick Pouyanne two weeks ago, with the president confidently stating, “In August, we will close our talks” about the project restart timeline. The announcement immediately boosted investor confidence, sending Mozambique’s $900 million bonds due 2031 rallying 1.4% to their highest level since October.
The Mozambique LNG project, located in the volatile northeastern Cabo Delgado province, was abruptly halted in 2021 when TotalEnergies evacuated workers and declared force majeure following escalating attacks by Islamic State-linked insurgents. The suspension drained momentum from $50 billion worth of liquefied natural gas developments in the region, affecting projects by Eni and ExxonMobil as well.
While Chapo acknowledged the ongoing security challenges, referring to the “small problem of jihad, terrorism,” he emphasized that the region is significantly more stable than four years ago. The deployment of Rwandan troops and regional forces has helped contain the insurgency, creating conditions for a potential restart.
Construction companies working on Total’s plant have reportedly begun preparing to resume operations, while Eni has awarded a contract to Samsung Heavy Industries to build its Coral North floating plant. The gas reserves discovered off Mozambique’s northeastern coast 15 years ago rank among the world’s largest, making this project restart crucial for the global LNG market.
Source: Bloomberg via worldoil.com
