Total’s $20 billion Mozambique LNG project delayed by at least one year

Total’s $20 billion Mozambique LNG project will be delayed for at least one year following new attacks near the Afungi site.

To remind, Total has declared force majeure on the giant LNG project earlier this week and withdrew all personnel from the site.

“Obviously, these events will impact the project and at this stage, we estimate the impact of at least a year of delay,” Total’s finance chief Jean-Pierre Sbraire told analysts on Thursday during a call discussing the firm’s quarterly results.

Total said on March 24 it would progressively resume construction activities at the Afungi site due to additional site security measures but the new attacks occurred the same day.

“We reported last month that the security situation around Palma was very serious. And considering the evolution of the security situation, in the north of the Cabo Delgado programs in Mozambique, Total decided to withdraw all Mozambique LNG project personnel from the LNG site,” he said.

Total working with contractors

Italian contractor Saipem also said this week it was not in a position to evaluate impacts on its financials for the year due to the uncertainty related to the Mozambique LNG project.

Saipem is a part of the project’s EPC contractor CCS JV, which includes McDermott and Chiyoda.

“We are managing the situation with contractors to minimize spending, as long as we do not have clarity on the situation,” Sbraire said.

“We hope that the actions carried out by the government of Mozambique, and its regional and international partners will enable the restoration of security and stabilize the Cabo Delgado problems in a sustained manner,” he said.

Total previously expected to launch the 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 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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