TotalEnergies Nears Completion of $15 Billion Financing for Mozambique LNG Project

TotalEnergies is close to securing $15 billion in funding to restart its LNG project in Cabo Delgado, Mozambique, with U.S. Exim Bank reaffirming $4.7 billion for the initiative. The project remains halted due to security concerns following terrorist attacks since 2021, with TotalEnergies seeking to resume operations amid ongoing safety assurances.

TotalEnergies announced that it is nearing the completion of $15 billion in financing to revive the natural gas exploration project in Cabo Delgado, Mozambique, following approval from the U.S. Export-Import Bank (Exim). Despite being in a state of force majeure, Maxime Rabilloud, TotalEnergies’ director for Mozambique, emphasized the significance of Exim Bank’s support, calling it a “critical step” in financing the project.

The U.S. Exim Bank reaffirmed $4.7 billion in funding on March 13, enabling the consortium to advance. TotalEnergies leads the Area 1 consortium, focusing on producing and exporting natural gas from a plant in Afungi, near Palma. However, the project remains suspended due to ongoing terrorist activities in the region, which prompted TotalEnergies to withdraw personnel in 2021.

The continuation of financing hinges on restoring security, currently aided by Rwandan forces. Rabilloud noted that approximately $15 billion in total financing has been confirmed from various international sources, including $5 billion from Asian banks, while reconfirmation from European banks is still required.

During a meeting in early February, TotalEnergies’ CEO Patrick Pouyanne had anticipated Exim Bank’s approval but warned of a delay until 2029-2030 for the commencement of LNG production due to lost progress.

Additionally, Mozambican President Daniel Chapo received assurances from Pouyanne regarding TotalEnergies’ commitment to restarting the Cabo Delgado project, with notable improvements in security acknowledged, albeit not yet ideal. This project aims primarily to serve customers in Asia and is part of Mozambique’s larger strategy to exploit its substantial natural gas reserves in the Rovuma basin.

In summary, TotalEnergies is on the verge of securing $15 billion in financing to reinstate its natural gas project in Cabo Delgado, contingent on improved security in the area. The reaffirmation of support from the U.S. Exim Bank is crucial for moving forward. However, previous delays have pushed the expected start date for production to 2029-2030, raising concerns about project oversight and regional stability.

Original Source: clubofmozambique.com