By Obiabin Onukwugha with agency reports
Mozambique and TotalEnergies have concluded plans to relaunch construction of the $20 billion liquefied natural gas project in the Southern African country.
Both parties made the decision on Thursday even as they continue negotiations over additional costs linked to delays.
It was gathered that the project was halted in 2021 following attacks in the northern province of Cabo Delgado, where the project is located.
TotalEnergies, which has taken extra equity with its partners after some backers pulled out, said late last year it was ready to resume work.
TotalEnergies has a 26.5 percent stake in the Mozambique LNG consortium. Japan’s Mitsui owns 20 percent, with ENH at 15 percent, and Bharat Petroleum, Oil India, and ONGC Videsh all at 10 percent. Thailand’s PTTEP holds the remaining 8.5 percent stake.
Chief Executive Officer of TotalEnergies, Patrick Pouyanne, who spoke at a ceremony to mark the project relaunch in Afungi, northeast Mozambique, assured of massive ramp up activities in the coming months.
He said a first offshore vessel has already been mobilized to begin installing the offshore infrastructure. “We have one target now, which is to deliver the LNG by 2029 on a budget of $20 billion, so there’s a lot of work to be done,” he said.
Pouyanne stated that TotalEnergies had already received an automatic license extension to cover the nearly five-year construction delay. “These small matters will be resolved as per our contracts and according to the rule of law,” he stated.
President Chapo, who commented on the development, stated that the two sides would negotiate to reach a consensus on revised costs once an audit is finalised.
“What must be clear is that negotiations do not impede the project’s progress. Restart is a reality. Within the next 12 to 18 months, we will return to this place to witness the start of construction on Rovuma LNG,” Chapo stated.
Reuters reports that In October, TotalEnergies wrote to Mozambique President, Daniel Chapo estimating that the project’s costs had risen by $4.5 billion in the years it had been on hold. It said the consortium wanted the development and production period extended by 10 years as partial compensation.
