Saipem says Mozambique LNG impact not yet clear

Italian contractor Saipem said it was not in a position to evaluate impacts on its financials for the year due to the uncertainty related to Total’s $20 billion Mozambique LNG project.

To remind, Total has declared force majeure on the giant LNG project following recent attacks near the Afungi site.

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

“Evaluations are underway in close cooperation with the client to preserve the value of the project,” Saipem said on Wednesday in its first-quarter report. The firm reported a net loss of 120 million euros ($144.7 million).

Contract worth $4.8 billion

“While awaiting for further instructions and the outcome of the ongoing assessments between the parties, currently Saipem is not in a position to evaluate impacts on its financials for 2021 and therefore to confirm or update the business scenario provided to the market on February 25,” the firm said.

Saipem’s part of the Mozambique LNG contract has a value of around 4 billion euros ($4.82 billion) of which about 1.4 billion euros relates to activities from April 1 to year-end, the firm said.

The firm added it would update the market when the situation becomes “sufficiently clear” and impacts can consequently be determined by the company.

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 Total, 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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