TotalEnergies has informed Mozambique that the cost of its liquefied natural gas project has increased by $4.5 billion during the four years it remained suspended. The company is also requesting a 10-year extension to its production agreement, according to a letter from its chief executive.
The French energy company confirmed that it has lifted force majeure on the project with its partners. Work was halted in 2021 after an Islamist militant attack, and the project’s cost was previously estimated at roughly $20 billion.
Before construction can resume, Mozambique’s council of ministers must approve the updated budget and project timeline.
In a letter to President Daniel Chapo, TotalEnergies CEO Patrick Pouyanne said the revised budget should account for the additional $4.5 billion in expenses caused by the suspension.
Mozambique’s oil and gas regulator is preparing its own estimate of the added costs and has not indicated when its assessment will be completed.
The lengthy delay has shifted the expected first LNG shipment to the first half of 2029, moving from the original target of July 2024.
To offset the economic impact of the prolonged interruption, the project’s operators are asking the government to extend the Golfinho-Atum development and production period by ten years.
The LNG project is around 40 percent complete, though insurgent attacks continue despite Mozambique’s new security agreement with Rwanda, whose forces have been helping secure the development area.
source: www.reuters.com
African Energy Council