TotalEnergies is close to completing $15 billion in financing for its LNG project in Cabo Delgado, Mozambique, following a critical endorsement from the US Exim Bank. The project remains suspended due to security concerns stemming from past terrorist attacks; however, measures to expedite its restart are in discussion. CEO Patrick Pouyanne has indicated potential timelines extending to 2029-2030 for LNG production.
TotalEnergies has announced that the financing of $15 billion for the resumption of its natural gas exploration megaproject in Cabo Delgado, Mozambique, is almost finalized, following approval from the US Exim Bank. Maxime Rabilloud, the director for TotalEnergies in Mozambique, emphasized the significance of the Exim Bank’s reaffirmation of support, a critical step towards advancing the project, which has remained halted due to ongoing security issues.
Following the Exim Bank’s recent decision to reaffirm $4.7 billion in financing on March 13, Rabilloud reiterated that the project still operates under ‘force majeure’ and has yet to restart. TotalEnergies is spearheading the construction of a facility in Afungi, Cabo Delgado, dedicated to the production and export of natural gas.
Due to insurgent activity in the region, the liquefied natural gas (LNG) project has been suspended since 2021. The funding consortium is reliant on enhanced security measures facilitated by Rwandan armed forces in their efforts to resume operations. Rabilloud confirmed that approximately $15 billion is secured through various financial institutions, including around $5 billion from Asian banks and pending confirmation from European banks.
On February 5, TotalEnergies CEO Patrick Pouyanne indicated potential delays pushing LNG production to between 2029 and 2030, acknowledging that recent setbacks have pushed timelines back further. Previously, during an investor meeting, he suggested that successfully restarting the project by 2024 was a priority.
Mozambican President Daniel Chapo received assurances from Pouyanne regarding TotalEnergies’ commitment to restarting the Cabo Delgado project. Pouyanne acknowledged the progress in enhancing security conditions but noted that the situation remains imperfect, as Cabo Delgado has experienced significant violence from groups affiliated with the Islamic State.
TotalEnergies holds a 26.5% stake in this major gas extraction initiative, aimed at supplying Asian markets, alongside local partners and Japan’s Mitsui, which owns a 20% share. Mozambique’s gas reserves in the Rovuma basin are among the most substantial globally, with three approved projects poised for development.
In summary, TotalEnergies is nearing finalization of a $15 billion financing package for the Cabo Delgado LNG project, contingent on security improvements. The Exim Bank’s reaffirmation of financial support is pivotal, although the project remains on hold due to ongoing conflict in the region. The leadership of TotalEnergies continues to express commitment to restarting operations, while the significant gas reserves in Mozambique present potential for future growth in the industry.
Original Source: clubofmozambique.com
