French energy giant TotalEnergies on Tuesday released a report regarding the humanitarian situation in the province of Cabo Delgado, as it looks to resume construction on its giant $20 billion Mozambique LNG project.
Besides publishing the report, TotalEnergies released the action plan decided by Mozambique LNG partners based on the recommendations of the report.
However, the firm did not provide any information when it expects its staff and contractors to return to the Afungi LNG site in Cabo Delgado province.
LNG Prime invited TotalEnergies to comment on the restart of the project.
A spokesperson for TotalEnergies said that project partners have decided on the action plan and that this plan will now be implemented.
“While noting improvements in the security situation on the ground, there is no restart date at this time,” the spokesperson said.
The French energy giant declared force majeure on the LNG project in April 2021 and withdrew all personnel from the site due to new attacks.
In February, Patrick Pouyanne, CEO of TotalEnergies, said the company was “not in a hurry” to restart the project, pointing out that security, human rights, and maintaining costs are the main three elements to make the decision to return to the site.
The CEO also entrusted Jean-Christophe Rufin, an expert in humanitarian action and human rights, with an independent mission to assess the humanitarian situation in the province.
The project’s EPC contractor is CCS JV, a venture between Saipem, McDermott, and Chiyoda.
Pouyanne recently said that some of the contractors of its Mozambique LNG project need to be “reasonable” regarding the cost terms of their contracts.
“Improved humanitarian situation”
Mozambique LNG includes the development of offshore gas fields in Mozambique’s Area 1 and a 12.8 mtpa liquefaction plant at the Afungi complex.
Besides TotalEnergies, other partners in the project are Japan’s Mitsui, Mozambique’s ENH, Thailand’s PTT, and Indian firms ONGC, Bharat Petroleum, and Oil India.
Almost 90 production of the Mozambique LNG project is sold through long-term contracts with key LNG buyers in Asia and in Europe.
TotalEnergies previously planned to start shipping cargoes in 2024.
The firm said that the report recalls that the conflict in the province of Cabo Delgado has origins pre-dating the gas development projects and finds its roots in multiple factors not related to Mozambique LNG.
“It notes an improved humanitarian situation in the north of Cabo Delgado, in particular with the return of the populations displaced by the conflict to the town of Palma and to a lesser degree to the town of Mocímboa da Praia,” it said.
Foundation
Following the recommendations made by Rufin, Mozambique LNG partners decided to establish a dedicated foundation for the implementation a socio-economic development program covering the whole territory of the Cabo Degaldo province.
“The action of the foundation will be guided by an objective of shared prosperity in the province, without waiting for the revenues expected during the production phase of the project,” TotalEnergies said.
In order to sustain its action, this foundation will be provided with a multi-annual budget of $200 million, according to TotalEnergies.
The Mozambique LNG partners also approved several actions regarding the populations affected by the development of the Afungi industrial site.
This includes accelerating the payment of compensations to families affected by the project, according to TotalEnergies.
Follow-up mission
TotalEnergies said the report notes that the security situation in the north of Cabo Delgado has “evolved positively” in 2022 and recommends reviewing the framework of relations between Mozambique LNG and the Mozambican Defense Forces in light of this situation.
Mozambique LNG has started a dialogue with the Mozambican authorities to this end, it said.
“Finally, a follow-up mission to monitor the implementation of this action plan will be carried out by Jean-Christophe Rufin at the request of Mozambique LNG project partners,” TotalEnergies added.
(Article updated to include a statement by a TotalEnergies spokesperson.)