Maputo — The Italian Ambassador to Mozambique, Gianni Bardini, believes that the Islamist terrorism that has been plaguing parts of the northern province of Cabo Delgado does not affect the operations carried out by the Italian multinational ENI in the Coral Sul floating platform off the coast of that province.
"The Coral Sul FLNG project is off the terrorist trail because it is more than 50 kilometers from the coast, although extreme violence has a negative impact on other ventures', the ambassador said, in an interview with AIM.
The Coral Sul floating LNG Project, anchored in Area 4 of the Rovuma Basin, started production in November 2022. The destinations of the liquefied natural gas produced by this platform are the European and Asian markets.
From November 2022 to June 2024, the platform carried out a total of 63 gas shipments, corresponding to 4.48 million tonnes of LNG.
"Safety is not a problem for ENI because the project is offshore. The gas is being extracted and liquefied 60 kilometers from the coast via a floating platform. The gas is extracted at a depth of around 2,000 metres and so ENI has never been impacted by the insurgency', he said.
However, according to Bardini, Saipem, which is another Italian company involved in the LNG project in Cabo Delgado, is affected by terrorism and it is still waiting for the resumption of onshore operations, headed by the French company TotalEnergies, which were interrupted in 2021 when terrorists attacked Palma town.
The onshore LNG project is budgeted at 23 billion dollars, easily the largest foreign investment in Mozambique to date.
Saipem is responsible for engineering the LNG project and has signed a seven billion dollar deal to implement the project.
"It only affects other Italian companies involved with TotalEnergies' Mozambique LNG project. It has stopped and is waiting to resume', he said.
Bardini also acknowledges that there has been significant progress in the fight against terrorism in Cabo Delgado and hopes that the TotalEnergies project will resume as soon as possible.
He believes that the resumption of this project will boost the Mozambican economy as a result of the revenues that the state will collect.
However, he believes that the burden of public debt, which has reached alarming levels of around 70 per cent of GDP, is challenging to the country.
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"The debt is limiting the country's ability to mobilize other sources of funding in international financial markets, because its level of indebtedness is unbearable. 92 per cent of the state budget is spent on paying wages and the cost of debt, both foreign and domestic, leaves only eight per cent of the budget for capital expenditure, a factor that slows down the country's development at all levels', he said.
According to the ambassador, since international funding is not very available, at the moment, Mozambique must reduce its domestic expenditure in order to regain the trust of international partners, "but this won't be solved overnight.'
