TotalEnergies, in partnership with partners, lifts force majeure on the $20 billion Mozambique Liquefied Natural Gas project

TotalEnergies, a French oil company, announced that it had lifted the force majeure for its $20 billion Mozambique Gas project with project partners. This comes four years after a militant Islamist attack halted construction.

TotalEnergies' press officer confirmed that a letter was sent on Friday to the Mozambican Government.

However, the company stated that the project will only be relaunched after the government has approved a revised budget and schedule. The company stated that before the project can be fully relaunched, the Mozambique council of ministers must approve an addition to the development plan. TotalEnergies is the operator of the project and the largest shareholder. The company forecasts that the 13 million-metric-ton per year project will be online in 2029. This is five years later than originally expected.

Costs to Rise by at Least $4 Billion?

Bharat Oil, an Indian investor in the project, said that the costs related to security as well as the four-year stoppage had increased the stated price of $20 billion by at least $4 billion. The Mozambique Government and the shareholders are currently negotiating how to split the extra costs.

TotalEnergies reported that contracts have been signed to sell 90% of the future output from the project, including long-term purchasers such as China's CNOOC and Shell. ENH, the state-owned energy company of Mozambique, will receive a portion of this gas.

Investors were attracted to Mozambique by major discoveries of offshore natural gas. Companies such as Italy's ENI, and U.S. giant ExxonMobil have stakes in the project. But the project's restart will draw attention to whether Mozambique has the political stability and the security necessary to exploit these reserves.

The project known as Mozambique LNG is 40% completed. TotalEnergies said that the remaining works will be carried out in "containment" mode, with only security-related workers being allowed to enter by air or water. TotalEnergies (26,5%), Japan's Mitsui (20%), ENH (15%) Bharat Petroleum (10%) Oil India (10%) ONGC Videsh (11%), and Thailand's PTTEP (8,5%) own Mozambique LNG. Reporting by America Hernandez in Maputo, Francesca Landini in Tokyo, Wendell Roelf and Gursimran K. Kaur, and Custodio C. Cossa, with editing by Richard Lough, Barbara Lewis and Barbara Lewis.

(source: Reuters)