TotalEnergies LNG Project in Mozambique Hits New Financial Snag

The government of Mozambique may not agree with the latest estimate for an LNG project led by TotalEnergies, which said earlier this week the price tag for the facility had gone up by $4.5 billion.

The French supermajor attributed the cost increase to the four years, during which work on Mozambique LNG was suspended following a deadly attack by Islamist militants that promoted a force majeure. TotalEnergies lifted the force majeure this week but said the delay had caused a significant cost increase and asked the local government to extend the construction and production timetable for the project by 10 years as partial compensation, Reuters reported earlier today.

“We will have to sit down and perceive in detail the foundations for this extension, … there may also be counter-arguments from the government,” Mozambique’s president Daniel Chapo said. he added that the government will go through the cost calculations for the project and “on our side, there will also be, without any doubt, counter-arguments.”

Mozambique LNG, which originally had a price tag of $20 billion, was going to be the biggest LNG project in Africa and also the biggest foreign investment in the continent. When completed, the facility would have an annual capacity of 13.12 million tons, sourced from two offshore fields, Golfinho and Atum.

Yet another liquefied natural gas project in Mozambique took the crown for biggest investment in African LNG. Led by Exxon, Rovuma is set to cost $30 billion and have annual capacity of 18 million tons. The project has yet to receive its final investment decision, which Exxon plans to do in the first quarter of 2026, after getting security guarantees from the Mozambican government. The area where both Mozambique LNG and Rovuma are located attracts militants, with recent reports suggesting a flare-up of violence.

By Irina Slav for Oilprice.com

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