The French energy giant TotalEnergies is signalling a renewed push to restart its massive liquefied natural gas (LNG) project in Mozambique’s Cabo Delgado province. Despite facing numerous hurdles, including ongoing security concerns and uncertainty surrounding US government support, the company has appointed a new project manager, Nicolas Cambefort, to spearhead its efforts.
Cambefort, an experienced engineer with a background in offshore wind energy, has replaced Stéphane Le Galles. During his tenure, Le Galles had cultivated strong relationships within Mozambique. This appointment signals a renewed commitment from TotalEnergies to the project, which has stalled since 2020 due to a regional security crisis.
The Mozambique LNG project, designed to produce 13 million tonnes of LNG annually, has faced significant setbacks. A wave of violent attacks by Islamist insurgents in Cabo Delgado forced TotalEnergies to declare force majeure in April 2021, effectively suspending construction.
The recent elections in Mozambique, marred by accusations of fraud and violence against the opposition, have further complicated the situation. The new president, Daniel Francisco Chapo, faces the daunting task of addressing the ongoing security crisis, including the presence of thousands of Rwandan troops deployed to quell the insurgency.
TotalEnergies is closely monitoring the political situation and awaiting a clearer indication of the government’s approach to addressing these challenges. The company is also awaiting a crucial decision from the US Export-Import Bank, which has been delaying its approval of financial support for the project.
The potential change in US leadership, with a possible return of a more pro-hydrocarbon administration, could significantly impact the US Exim Bank’s decision. TotalEnergies is hopeful that a new administration will be more receptive to the project and provide the necessary guarantees.
The fate of the Mozambique LNG project is intertwined with the progress of another major LNG development in the region: ExxonMobil’s Rovuma LNG project. ExxonMobil, which operates on the same Afungi peninsula, is also awaiting a crucial decision on its project. The company is expecting to make a final investment decision later this year or early next year, pending the completion of crucial engineering and design studies.
Both projects are dependent on US export guarantees, creating a crucial interdependency between them. As ExxonMobil also awaits the green light from the US Exim Bank, the success of both projects hinges on the resolution of these geopolitical and financial hurdles.
The arrival of Nicolas Cambefort in Maputo marks a significant step for TotalEnergies as it seeks to overcome these challenges and finally move forward with the Mozambique LNG project. The successful implementation of this project has the potential to significantly impact Mozambique’s economy and contribute to the global energy supply. However, numerous obstacles remain, and the company faces a delicate balancing act as it navigates the complex political and economic landscape in Mozambique.