Jan 31, 2023
TotalEnergies CEO Heads to Mozambique to Assess LNG Restart
(Bloomberg) -- TotalEnergies SE Chief Executive Officer Patrick Pouyanne plans to visit Mozambique this week to assess conditions for restarting the company’s giant liquefied natural gas project that was put on hold in 2021 because of Islamic State-linked violence, according to two government officials from the southeast African nation.
Pouyanne will travel to Cabo Delgado province, where the project is located, one of the officials said. It’s unclear if the company will announce plans to resume what was previously touted as Africa’s biggest private investment, costing at least $20 billion.
TotalEnergies declined to comment. Instituto Nacional de Petroleo, the oil and gas regulator, didn’t respond to an email seeking comment sent outside normal working hours.
A recommencement of the project would come at a critical time for Mozambique, whose entire economy is worth less than the construction cost of TotalEnergies’s LNG plant. Revenues from the project would be important to servicing the its sole $900 million eurobond after government debt soared to more than 100% of gross domestic product. The Mozambique LNG project could also play a key role in easing Europe’s energy crunch as Russia squeezes supplies.
Encroaching rebel attacks at the end of 2020 prompted the company to evacuate staff at the site. In March 2021, as TotalEnergies announced plans to restart, there was a major raid on Palma, the town closest to the development, leading the company to declare force majeure.
Read more: Mozambique Sees Call on $20 Billion Gas Project Restart By March
The Mozambican government asked for military help from Rwanda and a regional bloc later that year to contain the insurgency. The security situation has since improved, especially along the coastal strip in the far north where the project is located.
Pouyanne said a year ago during a trip to Maputo, Mozambique’s capital, that on his next visit he would travel to Cabo Delgado to see if life had returned to normal to allow the project to resume.
--With assistance from Paul Burkhardt and Francois de Beaupuy.
(Updates with Pouyanne’s previous visit in final paragraph)
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