Saipem expects to resume Mozambique LNG work in July, CEO says

Italian contractor Saipem is expecting to restart work on the TotalEnergies-led Mozambique LNG project in July this year, according to its chief executive officer Alessandro Puliti.

TotalEnergies declared force majeure on the $20 billion LNG project in April 2021 and withdrew all personnel from the site due to new attacks.

The project’s EPC contractor is CCS JV, a venture between Saipem, McDermott, and Chiyoda.

Saipem’s share for the onshore contracts is worth 3.5 billion euros ($3.72 billion).

“We expect to gradually restart the project, according to the information received by our clients, starting from July this year,” Puliti told analysts during Saipem’s 2022 earnings call on Tuesday.

TotalEnergies CEO Patrick Pouyanne recently said that the firm is “not in a hurry” to restart work on its giant Mozambique LNG project.

The CEO recently visited Cabo Delgado province, where the Afungi site is located, and entrusted Jean-Christophe Rufin, an expert in humanitarian action and human rights, with an independent mission to assess the humanitarian situation in Cabo Delgado province.

Prior to any decisions, Pouyanne said he would wait for the report regarding human rights, but he also said that firm would engage with the contractors regarding costs.

According to Puliti, an agreement in principle for the renegotiation of certain sections of the Mozambique LNG contract has already been achieved with TotalEnergies.

This would contribute to “derisk the initial phase of the project resumption in the best interest of Saipem and TotalEnergies, prior to return to the fixed contract for project completion,” Puliti said.

TotalEnergies had previously planned to launch the Mozambique LNG project in 2024. 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.

The project will also have a fleet of dedicated LNG carriers.

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.

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