Mozambique: Total Says Mozambique LNG Project On Track

Maputo — The French oil and gas company Total has insisted that its liquefied natural gas (LNG) project in the northern Mozambican province of Cabo Delgado is on track, despite attacks by islamist terrorists in the area.

Speaking at a Paris press conference on Tuesday, the Total Chief Executive Officer, Patrick Pouyanne, reported by the Bloomberg agency, said the company has reached an agreement with the Mozambican government over securing the area where the gas liquefaction plants are to be built.

This area is in the Afungi peninsula in Palma district, where a consortium headed by Total expects to invest over 23 billion US dollars, which will be the largest foreign investment ever in Mozambique.

A shoot-out with terrorists in the resettlement town of Quitunda, in the peninsula, on 1 January, triggered a decision by Total to withdraw temporarily many of its workers from Afungi. Nonetheless, Pouyanne told the Total shareholders he was confident that production of LNG will start, as planned, in 2024.

"It's not because we stop for two or three months that we can't reach the 2024 target," he said. While onshore work is suspended, engineering is quickly progressing and offshore work continues".

There should be up to 10,000 workers at Afungi, but Pouyanne admitted that, after the evacuation, less than 1,000 are in place.

It was the Mozambican government's responsibility to secure the area, Pouyanne said. An action plan had been drawn up on the deployment of forces, he added, and an agreement had been reached with Mozambican President Filipe Nyusi to control a perimeter of at least 25 kilometers. Ultimately the whole of Cabo Delgado province should be secured.

On Tuesday, Total also presented record losses of 7.242 billion US dollars. Total blames this collapse on the effects of the Covid-19 pandemic, and the fall in the international oil price. The company claims it is switching away from oil and towards LNG and renewable energies.

Total E&P Mozambique Area 1, Limitada, a wholly owned subsidiary of Total, operates the Mozambique LNG project, in Area One of the Rovuma Basin, with a holding of 26.5 per cent. The other members of the consortium are Mitsui of Japan (20 per cent), PTTEP of Thailand (8.5 per cent), the Indian companies ONGC Videsh Rovuma Limited., Beas Rovuma Energy Mozambique Limited and BPRL Ventures Mozambique B.V. (10 per cent each) and Mozambique's own National Hydrocarbon Company, ENH (15 per cent).

On 19 January, Nyusi granted Pouyanne an audience in Maputo, and the two men agreed on strengthening security at the Total camp on the Afungi peninsula.

According to a statement issued by Nyusi's office, "Among other matters, questions were discussed concerning security in the northern area of Cabo Delgado, which has been the target of terrorist attacks". Nyusi and Pouyanne agreed on the need to draw up a security plan that guarantees implementation of the LNG project without any further upsets.

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