PARIS, April 26 (Reuters) – French energy group Total has declared force majeure on its $20 billion Liquefied Natural Gas (LNG) project in Mozambique and confirmed it had withdrawn all staff from the construction site after Islamic State-linked insurgent attacks last month.
* Force majeure follows Islamic State-linked attacks in March
* Total, Exxon and others have projects in Mozambique
* Mozambique was hoping to rival Qatar and Australian LNG (Updates after news conference)
Don't want to see ads?
By Sudip Kar-Gupta
Dozens of civilians were killed in March in the coastal Mozambique town of Palma, near gas projects that are worth $60 billion and are aimed at transforming the East African nation’s economy.
The attacks have dealt a blow to plans by Total and rival Exxon Mobil, which also has an LNG project in Mozambique, to turn the country into a major LNG producer to rival Australia, Qatar, Russia and the United States.
It also comes as major energy companies reassess their approach to LNG, once seen as a fuel of the future because it has lower emissions than coal or oil but now under scrutiny in the drive to cut carbon emissions even more deeply.
“Considering the evolution of the security situation … Total confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total, as operator of Mozambique LNG project, to declare force majeure,” the company said on Monday.
Total, which aimed to produce its first cargo from the project in 2024, suspended work on March 27 after the militant attack.
Declaring force majeure implies a weightier suspension and allows Total to cancel contractors.
Carlos Zacarias, chairman of the institute that governs Mozambique’s energy development, told a news conference that Total would not fulfil contractual obligations while the force majeure was in place.
He added that Total has not abandoned the project.
Mozambique President Filipe Nyusi this month said the government would work to restore peace.
The LNG project includes development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession and the construction of a two-train liquefaction plant with capacity of 13.12 million tonnes per annum (mtpa).
Total secured a $14.9 billion debt financing package in July to fund its rollout. On Monday the company said it had agreement from the lenders to pause the debt drawdown.
It also said it was too early to provide an updated project schedule, though there was speculation among some contractors that the delay could last at least a year.
(Reporting by Dominique Vidalon, Sudip Kar-Gupta and Sarah White in Paris, Manuel Mucari in Maputo, Alex Winning and Emma Rumney in Johannesburg Writing by Dmitry Zhdannikov Editing by David Goodman and Edmund Blair)
Reuters
Reuters
Follow Save More Don't want to see ads? 
X 
27 April 2021
- 27 APRIL 2021
- Quick search
MAVERICK CITIZEN: TUESDAY EDITORIAL
Freedom isn’t free Mark Heywood 4 mins ago Save 4 mins
UK Sanctions
Britain’s new Global Anti-Corruption Regime kicks in, with the Guptas and Salim Essa among the first targets Peter Fabricius 13 hours ago Save 3 mins
NEWSDECK
News and reports from around the world Last updated: 20 hours ago Don't want to see ads?
ZAPIRO
Zapiro • 8 mins ago
"The wonder is not that the field of stars is so vast but that man has measured it." ~ Anatole France
Cabo Delgado
SADC military officials to propose a 3000-strong rapid response force to take on Mozambique jihadists
Peter Fabricius • 10 hours ago
Save 4 mins
Mozambique
Total declares Force Majeure and pulls all its people from Afungi gas plant Peter Fabricius 13 hours ago Save 3 mins
OPINIONISTA
The Dream Deferred might soon become The Dream Destroyed Professor Balthazar 16 hours ago Save 4 mins
South Africa
Happy Freedom Day (for some) 2Lani & Afritoons 10 mins ago Save < 1 min
Business Maverick
Cartoon Tuesday with Rico Rico 13 hours ago Save < 1 min
Daily Maverick © All rights reserved
Become an Insider
There are many great benefits to being a Maverick Insider. Removing advertising from your browsing experience is one of them – we don't just block ads, we redesign our pages to look smarter and load faster.
Click here to see other benefits and to sign-up to our reader community supporting quality, independent journalism.
