In a letter signed by the president of TotalEnergies, Patrick Pouyanné, addressed to the President of Mozambique on Friday, it was announced that the ‘force majeure’ clause, which had kept the project suspended since 2021, would be lifted. This decision aims to partially compensate for the economic impact caused by the stoppage due to terrorist attacks in Cabo Delgado, acknowledging that security conditions for resumption are now in place.
“The concessionaire respectfully requests the Government to grant an extension of the Development and Production Period of the [Golfinho-Atum field] for a duration of 10 years,” states the letter, which was accessed by Lusa today. The letter also proposes the “optimization” of the financial obligations of the Mozambican state oil company ENH, which is part of the Area 1 consortium in the Rovuma Basin, northern Mozambique.
It further notes that “as a final stage before the full launch of the project,” the Mozambique LNG concessionaire, led by TotalEnergies, “is awaiting the approval of the Government of Mozambique for the revised cost and schedule,” which has been submitted to the Ministry of Energy.
“The approval of this revised budget will cover the incremental costs incurred by the project due to ‘force majeure’ events, which total 4.5 billion dollars,” the letter states. The president of TotalEnergies recalls that the Mozambican Government conducted an audit of this process from 2021 to 2024, and the concessionaire “hopes to receive the report as soon as possible.”
“Furthermore, the prolonged suspension due to ‘force majeure’ significantly impacted the project’s schedule,” the letter indicates, noting that the first delivery of Liquefied Natural Gas (LNG) from the first line to be installed in Afungi, Cabo Delgado, has been postponed from July 2024, as initially planned, to the “first half of 2029.”
As a result, the deadline for the Development and Production Period of the Golfinho-Atum field will be extended by four and a half years, concludes the letter.
This concerns a 20 billion dollar (17 billion euro) megaproject led by the French oil company, whose advancement has been hindered in the past four years by terrorist attacks in that northern province of Mozambique.
“The Mozambique LNG consortium has decided to lift the ‘force majeure,’ and the Mozambican Presidency was officially informed of this decision on Friday through a formal letter,” a TotalEnergies official, leading the consortium in Area 1 of the Rovuma Basin, told Lusa on Saturday.
“As a final step before the complete relaunch of the project, the Mozambican Council of Ministers needs to approve an addendum to the Development Plan (PoD) with the updated budget and schedule,” the source added.
The president of TotalEnergies stated on September 30 the expected start of LNG production in Mozambique by 2029: “Everything is set. In fact, we are remobilizing on the ground.”
This investment led by TotalEnergies in Cabo Delgado is projected to produce an estimated 13 million tons per annum (mtpa) of LNG, which according to the oil company, is currently 40% developed.
In 2021, following violent terrorist attacks in the area, TotalEnergies invoked the “force majeure” clause and suspended operations due to the ongoing construction of a plant for natural gas production and export in Afungi Bay.
Mozambique has three LNG megaprojects off the coast of Cabo Delgado, with only Eni’s Coral Sul and now Coral Norte advancing offshore, while the others are developed onshore, particularly on the Afungi Peninsula.
