Total expects at least one year delay on Mozambique LNG project

Total said its Mozambique liquefied natural gas (LNG) project in the Afungi peninsula in Cabo Delgado province will be postponed for at least one year, putting off LNG delivery to 2025 at best.

Earlier this week, the French energy group declared force majeure on the $20bn project and withdrew all personnel from the Afungi site, following numerous insurgents attacks on the town of Palma, close to the project site.

“Obviously, these events will impact the project and at this stage we estimate an impact of at least a year of delay,” said Total CFO, Jean-Pierre Sbraire, during the company’s Q1 earnings conference call.

In the meantime, Sbraire said Total will give priority to the Cameron LNG extension and to the Papua LNG projects.

“We hope that the actions carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stabilise the Cabo Delgado province in a sustained manner,” he added.

Total operates Mozambique LNG with a 26.5% interest, acquired from Anadarko in 2019, alongside ENH Rovuma Área Um (15%), Mitsui (20%), ONGC (10%), Beas Rovuma Energy Mozambique (10%), BPRL Ventures(10%), and PTTEP (8.5%)

The project started with the discovery of a vast quantity of natural gas off the coast of northern Mozambique in 2010, leading to a $20bn final investment decision in 2019.

The LNG project ivnolves development of the Golfinho and Atum natural gas fields in the offshore area 1 concession and the construction of a two-train liquefaction plant with capacity of 13.12m tonnes per annum.

The force majeure authorises Total to call off contractors. “We are maniging the situation with contractors to minimise the spending as long as we do not have clarity on the situation,” said Sbraire.

Italian energy service company Saipem, and one of the main contractors on the project, was unable to provide an update on its 2021 guidance due to uncertainty over Mozambique LNG.

Adis Ajdin

Adis is an experienced news reporter with a background in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy.
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