TotalEnergies is nearing completion of $15 billion financing for the Cabo Delgado LNG project, following Exim Bank’s support. The project, halted due to security threats since 2021, faces operational delays, with potential production start pushed to 2029-2030. TotalEnergies is committed to resuming the project contingent on improved security.
TotalEnergies has announced that financing amounting to $15 billion for the natural gas exploration project in Cabo Delgado, Mozambique, is nearing completion. This follows the approval from the U.S. Export-Import Bank (Exim Bank), which reconfirmed its support for the project’s financing. Maxime Rabilloud, TotalEnergies’ director for Mozambique, emphasized the importance of this financing, although the project remains under ‘force majeure’ and has yet to resume operations.
On March 13, Exim Bank reaffirmed its commitment of $4.7 billion towards the project’s funding. TotalEnergies, leading the Area 1 consortium, aims to construct a plant in Afungi, near Palma, dedicated to natural gas production and export. Due to terrorist activity in Cabo Delgado, operations have been suspended since 2021, prompting TotalEnergies to withdraw staff and invoke force majeure, resulting in a reassessment of financial commitments needed to secure project resumption.
Rabilloud clarified that while U.S. Exim Bank has pledged its support, the Asian banks in the financing consortium have also reconfirmed approximately $5 billion, with financing support from European banks still pending. TotalEnergies CEO Patrick Pouyanne has indicated that operational delays could push LNG production start dates to 2029-2030.
In prior discussions, Pouyanne had mentioned a desire to restart operations in 2024, yet due to geopolitical challenges and security conditions in Cabo Delgado—an area troubled by conflict with Islamic State-associated terrorist groups—the timeline remains uncertain. Mozambican President Daniel Chapo has received assurances from TotalEnergies about the company’s commitment to restart the project, recognizing the improved yet imperfect security situation. TotalEnergies holds a 26.5% stake in the initiative, primarily targeting Asian markets, along with other partners, including Mitsui, which holds a 20% stake. Mozambique’s Rovuma basin project is recognized as one of the world’s largest natural gas reserves.
In conclusion, TotalEnergies is on the verge of completing $15 billion in financing for its natural gas project in Cabo Delgado, Mozambique, contingent upon security improvements in the region. With continued support from U.S. Exim Bank and international partners, the company expresses commitment to recommence operations, despite previous delays due to force majeure status and ongoing security threats. The strategic significance of this project remains, particularly for Asian markets, reflecting Mozambique’s vast natural gas potential.
Original Source: clubofmozambique.com
