Fitch Ratings suggests that TotalEnergies’ planned resumption of its Mozambique LNG project might influence ExxonMobil’s final decision on a $30 billion gas development in the country’s north.
In an analysis reviewed by Lusa, Fitch noted that restarting TotalEnergies’ LNG construction could create momentum for ExxonMobil’s long-awaited investment in its Rovuma LNG project, which has been under consideration for years.
Fitch stated that if TotalEnergies resumes construction, it could pave the way for ExxonMobil to approve its $30 billion LNG project.
This proposed development, which would include onshore facilities, is expected to drive economic growth during the construction phase.
If ExxonMobil moves forward, its project would become Mozambique’s largest LNG initiative, surpassing TotalEnergies’ planned 12.9 million tonnes per annum (mtpa) output with an 18 mtpa capacity.
ExxonMobil expects production from its LNG project to start after 2030.
Meanwhile, TotalEnergies continues developing its Afungi-based LNG facility in Palma for gas production and export.
The company halted the project in 2021 after violent attacks in Cabo Delgado forced it to invoke the force majeure clause and evacuate staff.
Now, TotalEnergies is preparing to restart operations, working on finalizing financing agreements.
At the same time, ExxonMobil is advancing its own plans, selecting US engineering firm McDermott in October 2024 to lead the Rovuma LNG project’s design phase.
McDermott, along with Italy’s Saipem and China Petroleum Engineering and Construction Corporation, aims to complete the Front-End Engineering Design (FEED) phase this year before ExxonMobil makes its final investment decision.
McDermott highlighted that Rovuma LNG Phase 1 represents a crucial opportunity for Mozambique’s economic growth.
The project will involve liquefying and exporting natural gas extracted from offshore fields in Mozambique’s Area 4, located near the Afungi Peninsula in Cabo Delgado.
ExxonMobil, Eni, and China National Petroleum Corporation (CNPC) collectively control a 70% stake in the Area 4 concession.
Mozambique’s LNG sector has faced setbacks due to security threats, as insurgent attacks in Cabo Delgado have delayed key energy projects for seven years.
However, with military interventions improving security, oil and gas companies are regaining confidence to resume operations.
Speaking at an industry event in New York on September 23, ExxonMobil’s vice president for external relations, Walter Kansteiner, stated that the company aims to complete Rovuma LNG’s technical design within a year.
Kansteiner confirmed that ExxonMobil launched the FEED phase, which typically takes about 12 to 13 months.
Initially, ExxonMobil projected Rovuma LNG to produce 15.2 million tonnes of gas per year but has since increased the estimate to 18 million tonnes.
On May 3, ExxonMobil’s general manager in Mozambique, Arne Gibbs, suggested that the company could make its final investment decision by late 2025.
Gibbs emphasized that Rovuma LNG could become Africa’s largest liquefied natural gas project and one of the continent’s biggest developments in history.
Mozambique has approved three LNG projects to tap into the vast gas reserves of the Rovuma Basin, one of the world’s largest.
While TotalEnergies’ project remains on hold due to security risks, efforts to restart it are underway.
If approved, ExxonMobil’s project could significantly boost Mozambique’s energy sector, attract foreign investment, and drive long-term economic growth.
However, security conditions and financial negotiations will ultimately determine when ExxonMobil makes its final investment decision.
source:energyinafrica.com
