Key Points:
- Costs Up $4.5B: TotalEnergies’ Mozambique LNG project costs rose by $4.5 billion after a four-year suspension.
- Production Delayed: First LNG output now expected in 2029, with a 10-year extension requested.
- Approval Pending: Government review and security issues are still delaying project restart.
CAPE TOWN, Oct. 26 — TotalEnergies SE has informed Mozambique’s government that costs for its TotalEnergies Mozambique LNG project have increased by $4.5 billion after a four-year suspension, according to a letter from the company’s chief executive. The French energy firm has also requested a 10-year extension to its production agreement to offset the financial impact of the delay.
The project, originally valued at $20 billion, was halted in 2021 following an Islamist militant attack in the Cabo Delgado province. TotalEnergies confirmed on Saturday that the force majeure has been lifted, allowing preparations for construction to resume. However, work cannot begin until Mozambique’s Council of Ministers approves an updated budget and timeline.
“The revised budget’s approval shall cover the incremental costs incurred by the project due to the force majeure, which amount to $4.5 billion,” Chief Executive Officer Patrick Pouyanne wrote in a letter dated Oct. 24 to Mozambique President Daniel Chapo.
Project delays push timeline
The suspension has significantly shifted the project’s schedule. According to the letter, the first LNG cargo from TotalEnergies Mozambique LNG is now expected in the first half of 2029, compared with the initial target of July 2024. The company cited the extended force majeure period as the reason for both the delay and the request for a longer production term.
“To compensate partially for the economic impact of the extended force majeure, the concessionaire respectfully requires the government to grant an extension of the term of the Golfinho-Atum development and production period by a duration of 10 years,” Pouyanne said in the correspondence.
Mozambique’s oil and gas regulator is currently preparing its own assessment of the additional costs. The agency has not yet announced when its review will be completed.
Production start moved to 2029
The TotalEnergies Mozambique LNG project, located in the country’s northern region, is about 40% complete. TotalEnergies has indicated that remaining work will proceed under strict security measures and “containment mode,” allowing personnel access only by air or sea.
Although Mozambique recently signed a security pact with Rwanda to stabilize the area, sporadic insurgent activity continues to pose risks to project operations.
TotalEnergies declined to comment on the correspondence, and the Mozambique president’s office did not immediately respond to requests for comment.
Government review pending
Before construction can restart, the government must evaluate and approve the revised financial plan and construction schedule. The council of ministers’ approval will determine how quickly the project can move forward toward completion.
Exxon Mobil Corp. is also developing a separate LNG project in the same region, signaling continued foreign interest in Mozambique’s natural gas potential despite ongoing security concerns.
TotalEnergies Mozambique LNG is jointly owned by TotalEnergies (26.5%), Japan’s Mitsui (20%), state-owned ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%), and Thailand’s PTTEP (8.5%).
Once operational, the project is expected to be one of Africa’s largest LNG developments, providing significant export revenue for Mozambique and supplying fuel to international markets. However, rising costs, regional instability, and extended timelines could challenge the project’s profitability and test investor confidence in the country’s energy sector.
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