TotalEnergies SE needs Mozambique’s approval for a $4.5 billion increase in cost to its liquefied natural gas project before restarting construction that’s been delayed since 2021 due to security issues.
The government signoff is required for “the incremental costs incurred” by the onshore facility during the closure of the site, the French oil major said in a copy of a letter seen by Bloomberg from Total Chief Executive Officer Patrick Pouyanne to Mozambique President Daniel Chapo.
The document also informed Chapo that the company and its partners had taken a decision to lift the force majeure status in place since Total froze the $20 billion plan after a major attack by Islamic State-linked militants on the nearby town of Palma. The company on Saturday said Chapo was told of the development in a protocol letter and a revised plan of development, but didn’t indicate the amount of the cost increase.
The project could transform the economy of one of the world’s poorest nations. Still, attacks by an Islamist insurgency that shut the project in the first place have increased in recent months. That’s occurred as Mozambique LNG has moved forward on other fronts: re-approving US funding for the project, and mobilizing contractors.
A Total spokesperson declined to comment. A Mozambique government spokesperson didn’t immediately respond to a request for comment.
Lifting of the first LNG cargo from the initial production line, or train, is now forecast to take place by the first half of 2029, almost five years later than the original target of July 2024, Total indicated in the letter. The maiden cargo from the second production line is expected to lift by the end of 2029.
Total also requested a 10-year extension to the development and production period of the project, and to amend how state oil company Empresa Nacional de Hidrocarbonetos will reimburse development costs.
The last approval could entail resolving a number of details before a complete commencement of the project can go ahead. “I remain fully available to discuss this with your Excellency as required,” Total’s CEO wrote in the letter.
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