The International Monetary Fund (IMF) anticipates the resumption of TotalEnergies’ liquefied natural gas (LNG) megaproject in Cabo Delgado, northern Mozambique, this year (2024), with first exports within four years.
“The onshore LNG project led by TotalEnergies is expected to resume development in 2024,” reads an IMF report on the fourth review of the Extended Credit Facility (ECF) program, completed this month and consulted today by Lusa.
Following the 2021 terrorist attacks in Cabo Delgado, TotalEnergies, which leads the Area 1 LNG consortium, suspended the project, one of the largest investments in Africa, valued at US$20 billion (€18.2 billion).
“With a view to improving security in the north, TotalEnergies carried out an assessment of the human rights situation in May 2023 and developed an action plan that establishes a basis for local socio-economic development,” the IMF report reads.
“Although they have not yet announced the official resumption of the development phase, it is scheduled for 2024, as soon as project financing is secured,” it adds, while forecasting the start of LNG exports for 2028, a year later than previously.
“However, the Coral FLNG project led by ENI, which began production at the end of 2022, is assumed to have reached 70% of annual capacity in 2023, and almost full capacity in 2024,” the report continues, admitting that revenue from natural gas exports will initially be less than 0.1% of GDP in 2023.
“[Revenue] is expected to reach 0.6% of GDP in 2028, when the first onshore project begins production,” the report states.
Mozambique has three natural gas projects approved for development in the Rovuma basin reserves, ranked among the largest in the world.
TotalEnergies is currently developing a plant near Palma for the production and export of natural gas, suspended since 2021 due to terrorist attacks.
The president of TotalEnergies, Patrick Pouyanné, in May acknowledged “positive progress” towards the resumption of this project, but without committing to any timeline.
“We are working on it, and it is better to work like this, it is gradual,” Patrick Pouyanné told journalists in Rwanda after a meeting with the Mozambican president, Filipe Nyusi, in which the status of the TotalEnergies project and security in Cabo Delgado were discussed.
“We discussed the conditions for resuming the project in Cabo Delgado. I believe we have made positive progress with all contractors and from that point of view we are ready to resume. We are also working with all funders to resume financing the project, and it is progressing well,” Pouyanné added.
Pouyanné said that he discussed with Filipe Nyusi the “security situation” and “the progress that has been achieved, in particular in the north of Cabo Delgado”, guaranteeing that the French oil company is “working in Palma”, although without clarifying whether the project would definitely be resumed this year.
“It shouldn’t be like this. It should be step by step, and when all things are put together, we will communicate,” he said.
President Nyusi said in Maputo on May 2 that it was essential to resume natural gas megaprojects given the “promising stability” in Cabo Delgado, and that financial decisions could not be an argument at this stage.
“This is essential because it cannot be a financial decision problem, now, associated with the terrorist situation. This project already existed, it is old. This means that there was clarity in its execution. It cannot run aground for this reason; let us look for others,” President Nyusi said.
