French oil major TotalEnergies said it, along with its project partners, had lifted force majeure on their $20 billion Mozambique LNG project, four years after an Islamist militant attack brought construction to a halt.
Notice was sent to the Mozambican government via letter on Friday, a TotalEnergies press officer said.
The company said, however, the project would only be relaunched once the government had approved an updated budget and schedule.
“Before fully relaunching the project, Mozambique’s council of ministers needs to approve an addendum to the plan of development,” the company said.
TotalEnergies, the project’s operator and leading shareholder, forecasts the 13 million metric-ton-per-year project will come online in 2029, around five years later than initially expected.
Costs rise by at least $4 billion?
Costs related to security and the four-year halt had added at least $4 billion to the project’s stated $20 billion price tag, Indian shareholder Bharat Petroleum said last year. Shareholders have been in negotiations with the Mozambique government to decide how the additional costs should be split.
Contracts have been agreed to sell nearly 90% of the project’s future output, TotalEnergies has said, with long-term buyers including China’s CNOOC, France’s EDF, and British major Shell. A portion of the gas is reserved for Mozambique’s state energy company ENH.
Major discoveries of offshore gas lured investors to Mozambique – where companies including Italy’s ENI and U.S major ExxonMobil also have stakes – but the project’s resumption will focus attention on whether Mozambique can provide the political stability and security needed to exploit those reserves.
The project, known as Mozambique LNG, is 40% complete. Remaining works will take place in “containment mode”, with workers allowed in by air or sea only for security reasons, TotalEnergies told a September 29 Investor Day.
On the coast of Chile, drought is causing a shortage of water which heavily impacts agriculture.
Mozambique LNG is owned by TotalEnergies (26.5%), Japan’s Mitsui (20%), ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%), and Thailand’s PTTEP (8.5%).
Source: Reuters
