The US Export-Import Bank approved a $5bn loan for the Mozambique LNG project by TotalEnergies, reviving the $20bn venture. This follows a previous $4.7bn commitment before construction was halted due to security issues. Project stakeholders are seeking further loans from the UK and Netherlands, while environmental groups express concerns about associated risks.
The US Export-Import Bank has approved a significant $5 billion (€4.61 billion) loan to aid the Mozambique LNG project led by TotalEnergies, thus revitalizing the ambitious $20 billion endeavor. This sanction follows a previous commitment of $4.7 billion made during Donald Trump’s presidency, which was postponed due to construction halts stemming from security issues and violent disruptions in Cabo Delgado province in Mozambique.
TotalEnergies CEO Patrick Pouyanne expressed optimism in awaiting further endorsements from credit agencies after the US’s approval. Previously stalled since 2021 due to a force majeure, the project seeks new loan endorsements from the UK and Dutch export credit agencies to proceed.
Estevao Pale, Mozambique’s Minister for Energy, voiced his confidence regarding support from the UK and Netherlands, noting his gratitude for the backing received from the American government. He stated, “We are deeply grateful for President Trump and the American people’s support for this important LNG project.”
Since its initiation in 2010, the Mozambique LNG project has aimed to exploit large natural gas reserves estimated at about 65 trillion cubic feet (tcf). Plans include constructing two liquefaction units with a capacity of 13 million tonnes per annum (mtpa), with potential expansion to 43 mtpa.
However, the progress of the project was hindered by an insurgency linked to ISIS, which raised considerable security concerns. Fortunately, improvements in security conditions have been noted, with Mitsui indicating preparations are underway to restart construction following successful renegotiations with contractors.
In contrast, environmental groups, such as Friends of the Earth Mozambique, have raised alarms concerning the underlying risks associated with the project. Daniel Ribiero, the technical coordinator for the group, remarked, “The human rights violations, armed conflict, environmental impacts and risky economic projections of the Mozambique LNG project should have kept most sensible investors away.”
In summary, the US Export-Import Bank’s recent sanction of a $5 billion loan marks a crucial development in the Mozambique LNG project led by TotalEnergies. As efforts continue to gain endorsements from additional credit agencies, the project faces opposition from environmental groups citing significant security and human rights concerns. The future of this vital energy initiative hangs in a delicate balance as stakeholders navigate both economic prospects and ethical considerations.
Original Source: www.offshore-technology.com
