TotalEnergies SE is awaiting a critical decision from the US Export-Import Bank regarding a $4.7 billion loan for its $20 billion liquefied natural gas facility in Mozambique. The project has faced delays due to militant attacks, and recent changes in the bank’s appointments by Trump may facilitate loan approvals. CEO Patrick Pouyanne remains optimistic about securing the necessary financing to restart construction and support economic growth in Mozambique.
TotalEnergies SE’s liquefied natural gas facility in Mozambique, valued at $20 billion, is expected to reach a decision regarding financing from the US Export-Import Bank soon. This development is pivotal for resuming the Mozambique LNG project, which faced construction halts due to militant attacks connected to Islamic State in the region four years prior.
Initially, the Export-Import Bank agreed to a loan of $4.7 billion in 2019, yet recent approvals are needed due to the delay. Recent changes in the bank, including appointments by former President Donald Trump, aim to bolster US energy initiatives and support employment within the oil and gas sector. Trump’s recent appointments have set the stage for a board quorum at the bank, enabling it to operate effectively.
During a CERAWeek interview, TotalEnergies’ CEO Patrick Pouyanne indicated that amending the financing documents for Mozambique LNG to reflect an updated completion date of 2030 is essential. He attributed the project’s delay to the necessary security and financial approvals after the four-year force majeure. Obtaining this financing would greatly assist TotalEnergies in recovering the investments made thus far.
Additional loan approvals are still awaited from export credit agencies in the UK and the Netherlands. A representative from the Export-Import Bank emphasized that the new board quorum allows for operational continuity, enabling key financial reviews.
Efforts were made to secure loan renewals during the Biden administration, including lobbying efforts by TotalEnergies. Pouyanne expressed confidence that the required approvals will be successfully granted, boasting that over 40% of contracts have been awarded to US firms. However, the project continues to face difficulties, including canceled supply contracts and suspension of work at the construction site after initial plans to house temporary workers were put on hold.
In conclusion, the fate of TotalEnergies’ Mozambique LNG project hinges on key financing from the US Export-Import Bank, with a decision likely imminent. The project, which has faced significant delays due to security concerns and changes in administration, requires renewed approvals to move forward. The cautious optimism expressed by TotalEnergies’ leadership reflects the importance of this venture to both the company and the Mozambique economy as it strives to achieve economic transformation.
Original Source: financialpost.com
