- The parties have yet to agree on additional costs of USD 4.5 billion incurred during the shutdown period
- The project currently employs more than 5,000 people, a figure that could double at the peak of construction
By MOZTIMES
Pemba (MOZTIMES) – The French oil and gas company TotalEnergies on Thursday relaunched the Mozambique LNG project valued at USD 20 billion, aimed at the extraction, liquefaction and export of natural gas.
The onshore facilities are on the Afungi peninsula, in Palma district, in the northern Mozambican province of Cabo Delgado.
The project had been suspended since March 2021 following a major attack against Palma town by local insurgent groups who claim affiliation with the Islamic State.
Mozambican President, Daniel Chapo, presided over the relaunch ceremony, which was also attended by TotalEnergies’ CEO, Patrick Pouyanné. In his address, Chapo said the relaunch symbolises the confidence of TotalEnergies and its partners in continuing to invest in Mozambique, despite the conflict persisting in the region.
According to the President, the project currently employs around 5,000 people, 80 per cent of whom are Mozambican and 40 per cent from Cabo Delgado province. Chapo stressed that the project will contribute to the economic development of both the country and the province.
During the shutdown period, TotalEnergies said it incurred additional costs estimated at around USD 4.5 billion, which the company argues should be recovered before the payment of taxes to the Mozambican state. The lack of agreement over this amount is reported to have delayed the resumption of the project since September last year, with no final settlement reached to date.
The Mozambican Government has ordered an audit of the costs associated with the project’s shutdown period. Chapo said the parties have agreed to proceed with the relaunch while awaiting the audit’s findings, signalling that an agreement may be imminent.
The project, which has an expected lifespan of 30 years, is set to be extended by a further 4.5 years, corresponding to the period during which it was suspended.
This is the largest LNG project in Mozambique and sub-Saharan Africa. Its resumption has fuelled expectations that another project on a similar scale, Rovuma LNG, operated by ExxonMobil, could announce its final investment decision within the next 12 months. (MT)
