The US Export-Import Bank has approved a $5 billion loan for the Mozambique LNG project, a critical step towards resuming the $20 billion venture led by TotalEnergies. This project has been stalled since 2021 due to security issues. Environmental groups have raised concerns about the associated risks, despite improved security conditions.
The United States Export-Import Bank has approved a loan of $5 billion to support the Mozambique LNG project led by TotalEnergies. This approval signifies a crucial step toward resuming the $20 billion project, which had faced delays due to severe security issues in Cabo Delgado province since 2021. Previous financial commitments include $4.7 billion under President Donald Trump, now reassessed after the suspension of construction due to violence in the area.
TotalEnergies’ CEO, Patrick Pouyanne, expressed optimism regarding this approval, noting that further backing from other credit agencies is anticipated. The Mozambique LNG project has been inactive since its declaration of force majeure in 2021 and currently awaits reapproval from UK and Dutch export credit agencies.
Estevao Pale, Mozambique’s Minister for Energy, conveyed confidence in securing the renewed commitments from UK and Netherlands, expressing gratitude for past support. He remarked, “We are deeply grateful for President Trump and the American people’s support for this important LNG project.”
The Mozambique LNG project began in 2010 after discovering a significant natural gas reserve along Mozambique’s northern coastline. It is projected to contain approximately 65 trillion cubic feet of recoverable natural gas, aiming to build two liquefaction units with a combined capacity of 13 million tonnes per annum, potentially expandable to 43 million tonnes per annum.
The construction has been hindered by an insurgency linked to the Islamic State, resulting in high security concerns. However, reports indicate enhanced security conditions, and Mitsui, a partner in the venture, has stated that preparations for resuming construction are underway after renegotiating with contractors.
Despite the unfolding positive developments, environmental organizations have voiced concerns regarding the project’s security risks. Daniel Ribiero, technical coordinator for Friends of the Earth Mozambique, stated, “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 $5 billion loan marks a significant advancement for the Mozambique LNG project, which has faced lengthy disruptions due to security concerns and violence. With anticipated support from additional credit agencies and reported improvements in local security, the project may finally resume construction. However, it continues to face criticism from environmental advocates regarding its potential risks.
Original Source: www.offshore-technology.com
