TotalEnergies is close to securing $15 billion in financing to restart its LNG project in Mozambique, pending improved security conditions. Exim Bank has confirmed a $4.7 billion commitment, but the project has been paused since 2021 due to regional instability. The company’s CEO has indicated potential delays in production timelines, highlighting security issues as a significant concern.
TotalEnergies has announced that it is nearing completion of the $15 billion financing necessary to restart its natural gas exploration megaproject in Cabo Delgado, Mozambique, following approval from the US bank Exim. The director of TotalEnergies for Mozambique, Maxime Rabilloud, emphasized the importance of this financing and noted that the project remains under force majeure, preventing its restart at this time.
The Exim Bank confirmed its support with $4.7 billion for the total financing package on March 13, 2023. TotalEnergies is leading the development of a plant in Afungi, near Palma, aimed at producing and exporting natural gas. However, the project has been indefinitely suspended since 2021 due to terrorist activities in the region, prompting TotalEnergies to withdraw its personnel and activate a force majeure clause.
The financial resumption hinges on improved security in the area, which is being supported by Rwandan armed forces. The total financing for the project comprises contributions from several international banks and credit agencies, including a $5 billion commitment from Asian banks, with confirmations from European banks still outstanding.
On February 5, TotalEnergies CEO Patrick Pouyanne indicated that approval from Exim Bank was anticipated despite potential delays, signaling a start to LNG production may now be pushed back to 2029-2030. Earlier discussions with Mozambican President Daniel Chapo revealed TotalEnergies’ commitment to restart the initiative, although security conditions remain a significant concern.
The gas project, halted due to a violent attack tied to jihadist groups, has major stakes held by TotalEnergies (26.5%), Mozambican partners, and the Japanese firm Mitsui (20%). Mozambique is home to three major projects aimed at harnessing significant natural gas reserves in the Rovuma basin, recognized as among the world’s largest.
TotalEnergies is on the verge of finalizing its $15 billion financing package for the natural gas project in Mozambique following Exim Bank’s confirmation of support. However, the resumption of the project remains contingent on improved security in Cabo Delgado, currently overseen by Rwandan forces. As the situation develops, the overall commitment from various international banks remains critical to the project’s future.
Original Source: clubofmozambique.com
