Mozambique’s President has urged the country’s private sector to take advantage of a pipeline of liquefied natural gas (LNG) projects worth around $50bn as the country seeks to establish itself as a regional energy hub.
At first glance, the African nation appears well placed to achieve that ambition. The Rovuma Basin, located off its northern coastline, holds an estimated 130 to 140 trillion cubic feet of recoverable natural gas.
The reserves have attracted several major energy companies seeking to develop large-scale export projects.
Together, projects already operating or under development represent more than 40 million tonnes per annum (mtpa) of LNG capacity.
They include the Eni-led Coral South FLNG (operational) and Coral North FLNG (expected in 2028); the TotalEnergies-led Mozambique LNG project (targeting 2029); and the ExxonMobil-led Rovuma LNG development, which is targeting a final investment decision in 2026 or 2027.
Speaking at the Mozambique CEO Summit this week, President Daniel Chapo said the country’s natural resources, infrastructure and strategic location could help unlock investment capable of transforming the domestic economy.
Chapo also called for greater participation from Mozambican businesses, urging local companies to position themselves for opportunities in procurement, logistics, engineering and other services linked to the country’s expanding LNG industry.
The government’s wider strategy aims to increase domestic participation in projects expected to generate more than $4bn in contracts for local businesses.
Despite that optimism, the country’s LNG ambitions have faced major hurdles.
TotalEnergies finalised the financial structure for Mozambique LNG earlier this year, but has faced several setbacks that could still affect future projects.
The $20bn project, expected to become Africa’s largest-ever foreign direct investment, secured financing in 2020. However, the following year TotalEnergies declared force majeure after Islamist insurgents carried out attacks in northern Mozambique close to the project site.
This required export credit support to be reapproved by the Export-Import Bank of the US, as well as export credit agencies backed by the UK and Dutch governments.
In late 2025, the UK government and the Dutch export credit agency Atradius announced plans to withdraw $1.47bn in export finance from the project, citing security concerns.
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“My officials have evaluated the risks around the project, and it is the view of His Majesty’s Government that these risks have increased since 2020,” said Peter Kyle, UK Secretary of State for Business and Trade.
The consortium replaced those funds with internal equity and retained around 90% of its original external lenders, including a $4.7bn commitment from the Export-Import Bank of the US.
TotalEnergies resumed full construction at the project on January 29, 2026, after force majeure was lifted on November 7, 2025.
Area 1 Mozambique LNG project ©Anadarko Petroleum Corporation
The decision to continue backing the project contrasts with the assessment of Simon Nicholas, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA).
“There are a growing number of reasons the US, UK and the Netherlands should not finance the Mozambique LNG projects,” he wrote. “They can take solace from the fact that Mozambique will likely be better off without it.”
ExxonMobil faced the same security challenges as TotalEnergies because both LNG projects are located adjacent to each other on the Afungi Peninsula in the northern Cabo Delgado province.
The energy giant also declared force majeure in 2021 after Islamic State-linked militant attacks near Palma and the construction zones.
Nicholas cited post-election unrest and ongoing security concerns as evidence that the project’s risks remain elevated.
He also pointed to renewed scrutiny over security arrangements in northern Mozambique, including controversy surrounding the presence of Rwandan troops deployed to combat the insurgency, as another source of uncertainty for the project.
An oversupply of LNG may be looming
Aside from the security concerns, Nicholas argued there is another reason financiers should avoid backing the project.
IEEFA has repeatedly warned that a wave of new LNG export capacity is expected to outpace demand growth, creating an oversupplied market and putting downward pressure on prices.
It previously forecast global production capacity to grow by around 193 mtpa from 2024 through 2028.
Although delays to Qatar’s North Field expansion and the US Golden Pass project have expectations of a global supply glut, analysts still expect substantial new export capacity to enter the market later this decade.
A recent S&P Global Energy study also forecasts US LNG feedgas demand to double over the next five years as the country expands its export capacity and increases its share of the global LNG market.
