US Export-Import Bank Approves $5 Billion Loan for Mozambique LNG Project

The US Export-Import Bank has sanctioned a $5 billion loan for the Mozambique LNG project led by TotalEnergies, facilitating the resumption of a previously halted $20 billion venture. The project has faced challenges due to security concerns linked to insurgency in the Cabo Delgado province. Improved security conditions are noted, though environmental groups express continued opposition.

The US Export-Import Bank has approved a $5 billion loan to facilitate the Mozambique LNG project led by TotalEnergies. This development is significant as it signifies a move toward resuming the overall $20 billion project that had been paused due to security issues. Originally, a $4.7 billion commitment was granted under former President Donald Trump, but construction ceased in 2021 due to violent disturbances near the Cabo Delgado site.

TotalEnergies CEO Patrick Pouyanne previously anticipated the US endorsement, mentioning that support from additional credit agencies would likely follow. As the project remains on hold due to a force majeure, loans from UK and Dutch export credit agencies are also pending reapproval. Mozambique’s Minister for Energy, Estevao Pale, expressed optimism regarding their continued support.

The Mozambique LNG initiative began in 2010 with the discovery of extensive natural gas reserves in northern Mozambique. It is projected to contain around 65 trillion cubic feet (tcf) of recoverable natural gas, featuring two liquefaction units initially capable of processing 13 million tonnes per annum (mtpa), with plans for future expansion to accommodate 43 mtpa. However, construction has been disrupted by insurgency-related security concerns.

Recent reports suggest improved security conditions, with Mitsui, a partner company, confirming that preparations for the resumption of construction are underway following contractor renegotiations. Despite these positive developments, environmental groups have raised concerns regarding ongoing security risks, stating that they should have deterred investment in the project, according to Friends of the Earth Mozambique’s technical coordinator, Daniel Ribiero.

In conclusion, the recent approval of a $5 billion loan by the US Export-Import Bank represents a critical advancement for the Mozambique LNG project. The project aims to harness significant natural gas reserves, pending support from UK and Dutch agencies amid ongoing security concerns. While signs of progress are evident, the project continues to face scrutiny from environmental advocates regarding potential risks and human rights issues.

Original Source: www.offshore-technology.com