TotalEnergies is nearing $15 billion in financing to restart its natural gas project in Cabo Delgado, Mozambique, following support from the U.S. Exim Bank. The project has been inactive since 2021 due to security issues related to terrorist attacks. TotalEnergies awaits final approvals from European banks and emphasizes the importance of enhanced security for resuming operations.
TotalEnergies has announced that it is nearing completion of $15 billion in financing crucial for resuming its natural gas exploration project in Cabo Delgado, northern Mozambique. Following the commitment from the U.S. Export-Import Bank (Exim Bank), TotalEnergies confirmed that this is a vital step necessary for the project’s future. Maxime Rabilloud, the director for Mozambique, stated, “This is a very important financing, it is a critical step.”
The Exim Bank had reaffirmed its support with $4.7 billion allocated to the project on March 13. TotalEnergies, which leads the Area 1 consortium, is focused on constructing a liquefied natural gas plant in Afungi, near Palma to facilitate production and export. The project, however, has been on hold since 2021 due to security concerns linked to terrorist attacks in the region.
Rabilloud mentioned that the financing also relies on security improvements, conditional on the presence of the Rwandan armed forces in the area. The total financing package of $15 billion includes $5 billion from Asian banks, with just the reconciliation of European banks’ funding pending. TotalEnergies’ CEO Patrick Pouyanne indicated potential delays in production start dates, now expected around 2029-2030.
While expressing commitment to the project, Pouyanne referred to positive changes in security conditions, though he acknowledged that the situation remains imperfect. The gas project was suspended after a deadly attack by jihadist groups linked to the Islamic State in 2021. TotalEnergies holds a 26.5% stake in the project, working alongside Mozambican partners and Japan’s Mitsui, which holds a 20% stake, to exploit natural gas reserves in the Rovuma basin, one of the world’s largest.
In summary, TotalEnergies is close to securing the $15 billion needed to resume its natural gas project in Mozambique, contingent upon reaffirmation from various banks, including Exim Bank. The project has been dormant since 2021 due to security issues resulting from terrorist acts, but recent developments suggest a potential path forward, provided security conditions improve further. This project is crucial for Mozambique and its significant natural gas reserves, with production anticipated to target Asian markets.
Original Source: clubofmozambique.com
