TotalEnergies Awaits Key Decision on $4.7 Billion Loan for LNG Project in Mozambique

TotalEnergies is set to decide on a $4.7 billion loan from the US Export-Import Bank for its Mozambique LNG project, which has faced significant delays due to militant violence. This decision is crucial for the company’s continued investment and economic growth for Mozambique, though further approvals are still needed.

TotalEnergies SE’s significant $20 billion liquefied natural gas (LNG) facility in Mozambique is on the cusp of a crucial decision regarding a $4.7 billion loan from the US Export-Import Bank. This financing decision is scheduled for Thursday, marking a pivotal moment for the project, which has faced delays due to militant attacks in the region.

Originally approved in 2019 during the Trump administration, the financing has required new approvals after a prolonged hiatus. Recent efforts from Trump to bolster the US energy industry have included appointing new officials to the bank’s board. Among these appointments is Bryce McFerran, who has taken on the role of acting chief banking officer after a career in commodity trading.

The agenda for the Exim board meeting includes an amendment to financing documents for the Mozambique LNG project, a necessary step to extend the project’s completion date to 2030, a reflection of the delays incurred. TotalEnergies’ CEO, Patrick Pouyanne, expressed optimism about the impending approval and the operational capabilities of Exim under the new administration.

Securing these funds would enable TotalEnergies to recommence work on the Mozambique project, which has already seen substantial financial investment from the company. Additionally, it is anticipated to provide significant economic benefits to Mozambique, which has awaited the completion of the project as a catalyst for growth. However, pending approvals from other export credit agencies remain.

A spokesperson from Exim emphasized the importance of the new board’s quorum, allowing the bank to pursue financing strategies and address important policy concerns regarding the Mozambique LNG project. Past attempts to secure approval for the loan during the previous administration were challenging, prompting TotalEnergies to engage lobbyists and advocate directly for support.

As TotalEnergies navigates the complexities of returning to site operations, assurances of worker safety and financing are paramount. After a four-year hiatus, existing contracts faced cancellation, and preparations for a temporary campsite for 9,500 workers were halted amidst ongoing security concerns.

In summary, TotalEnergies is nearing a decisive moment regarding a $4.7 billion loan to revive its Mozambique LNG project, stalled due to security challenges. The upcoming Exim board meeting could facilitate the necessary financing to propel the project forward, promising economic benefit for Mozambique. However, further approvals from additional agencies and the establishment of safe working conditions are critical for the project’s success.

Original Source: financialpost.com