The U.S. Export-Import Bank approved a $5 billion loan for the Mozambique LNG project by TotalEnergies, reviving a $20 billion venture previously halted due to security issues. With hopes for additional backing, concerns regarding human rights and environmental impacts persist among advocacy groups.
The Mozambique LNG project has received a significant boost with a $5 billion loan sanctioned by the U.S. Export-Import Bank to support TotalEnergies’ $20 billion initiative. This development follows a prior commitment of $4.7 billion made during President Donald Trump’s administration, which was reassessed following the halt of construction in 2021 due to security concerns in Cabo Delgado province.
TotalEnergies CEO Patrick Pouyanne expressed optimism about the U.S. support and anticipated additional backing from other credit agencies. The project remains on hold since 2021 due to force majeure status, pending re-approval from both UK and Dutch export credit agencies.
Mozambique’s Minister for Energy, Estevao Pale, conveyed his optimism regarding the UK and Netherlands reaffirming their support, stating, “We are deeply grateful for President Trump and the American people’s support for this important LNG project.” The Mozambique LNG project commenced in 2010 with the discovery of substantial natural gas reserves, estimated at around 65 trillion cubic feet.
The project entails building two liquefaction units with a current capacity of 13 million tonnes per annum, with potential expansion to 43 million tonnes per annum. Construction has faced interruptions due to an insurgency tied to the Islamic State, but improved security conditions have reportedly enabled a renegotiation process with contractors for project resumption.
Despite this positive outlook, environmental organizations have raised concerns regarding the project’s security implications, arguing that such risks should deter financial support. Friends of the Earth Mozambique’s technical coordinator, Daniel Ribiero, remarked, “The human rights violations, armed conflict, environmental impacts, and risky economic projections of the Mozambique LNG project should have kept most sensible investors away.”
The Mozambique LNG project, led by TotalEnergies, has received a $5 billion loan from the U.S. Export-Import Bank, revitalizing its once-suspended operations. Future support from other credit agencies is anticipated, although concerns persist over security and environmental implications. The project’s progress highlights the interplay between energy development and various socio-political challenges in Mozambique.
Original Source: www.offshore-technology.com
