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TotalEnergies declared force majeure on the Mozambique LNG project in April 2021 and withdrew all personnel from the site due to new attacks.
Mozambique LNG includes the development of offshore gas fields in Mozambique’s Area 1 and a 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.
“Everything settled” with contractors
Mozambique LNG’s EPC contractor is CCS JV, a venture between Saipem, McDermott, and Chiyoda.
Last year, Pouyanne said the company was “not in a hurry” to resume the project, pointing out that security, human rights, and maintaining costs are the main three elements to make the decision to return to the Afungi site in the province of Cabo Delgado.
In April this year, he said that TotalEnergies had “good” discussions with Mozambique LNG contractors and they agreed not to inflate the costs of the contracts.
Asked about potential cost escalations at Mozambique LNG during the company’s second quarter results call on July 25, Pouyanne said that “everything has been settled with the contractors.”
“So we are clear: we know where we are. In fact, it was more a matter, to be honest, of the cost of the frozen period, which was to be absorbed and discussed, because between 2020 to 2024, we have frozen some works. We have some equipment which was kept in different locations,” he said.
“All that has been discussed, all that is settled with them. And so we are on the way to move forward,” he said.
By end of the year
Pouyanne said that the “progress has been done in many directions, including on security.”
“Now we try to regroup all the financers around the project,” he said.
“As you know as well, there are some presidential elections in Mozambique coming soon. And so of course, for us, it’s important to have the confirmation that the new president will follow the same policy regarding these large projects,” he said.
“That’s where we are. So say, by end of the year, we should clarify how we should be able to move forward,” Pouyanne said.