The restart of the Mozambique LNG project by TotalEnergies marks a major turning point for the African energy sector and the Mozambican economy.
A Strategic Project Relaunched After Four Years of Suspension
TotalEnergies, the French energy giant, has announced its intention to restart its Mozambique LNG project before the end of 2025. This massive 20 billion USD investment had been suspended since 2021 due to insecurity in the Cabo Delgado province. This decision follows a notable improvement in the security situation and the securing of major financing, including a 4.7 billion USD loan from the U.S. Export-Import Bank.
A Major Project for Mozambique and TotalEnergies
Located in Area 1 of the Rovuma Basin, the Mozambique LNG project aims to exploit significant offshore natural gas reserves, with an initial production capacity of 13 million tons per year, expandable to 43 million tons. Once operational, it will position Mozambique as the world’s second-largest producer of liquefied natural gas (LNG).
TotalEnergies holds a 26.5% stake in the project alongside partners such as the Japanese group Mitsui (20%) and the Mozambican state-owned company ENH (15%). This project is part of TotalEnergies’ broader African strategy, which also includes other gas developments and investments in renewable energy across the continent.
Record Financing and Major Economic Stakes
The project benefits from a senior debt financing package of 14.9 billion USD, the largest ever granted in Africa, complemented by the 4.7 billion U.S. loan. This crucial financial support allows the lifting of the force majeure declared in 2021 and paves the way for the resumption of work in the coming months.
For Mozambique, this project represents a significant economic lever, expected to boost national growth, projected by the IMF to reach 10% by 2028, and to transform the country into a key player in the global LNG market. However, security and social challenges remain pressing, with criticism regarding the human and environmental impacts of the project.
Security and Controversies: A Still Fragile Context
The project’s restart comes amid ongoing insurgent activity in the Cabo Delgado region, which led to the suspension of operations in 2021 after deadly attacks. The security situation has improved thanks notably to the deployment of Rwandan troops, but judicial investigations are underway in France concerning allegations of involuntary manslaughter related to the evacuation of the site during the attacks.
Managing these risks remains a crucial challenge for TotalEnergies and the Mozambican government, who must ensure the stability necessary to continue the project while addressing concerns from local populations and the international community.
Outlook and Challenges in the Global LNG Market
As Mozambique LNG prepares to enter the global market, it may face gradual saturation with the upcoming arrival of large new volumes from Qatar and the United States. This development could put downward pressure on LNG prices, representing an additional challenge to the project’s profitability.
TotalEnergies is nonetheless betting on the rapid resumption of construction to consolidate its position in the African gas sector and meet global energy demand, while continuing its investments in renewable energy.
