TotalEnergies wants to resume Mozambique LNG project after its bloody suspension

The French fossil fuel giant is ready to reinstate its agreement with the Mozambican government. The agreement concerns the $20 billion Mozambique LNG project, which has a long history: the first activities date back to 2010. Total withdrew from the project after a massive terrorist attack in 2021.

At the end of March and beginning of April 2021, a military clash took place, during which the Mozambican government, together with several other political actors and private military contractors, fought a Mozambican Islamic State cell. Many residents died amid the fighting and massacres in the city of Palma, and TotalEnergies had to evacuate all its personnel working on the Mozambique LNG project. The company also became embroiled in a controversy over failing to help some civilians. It denied the allegations.

After a brief battle, the Mozambican government restored order in the city and the project area, although the clash is considered an ISIS success. A return was complicated by damaged infrastructure and persistent fears of instability. In a 2023 statement, the company said that restarting the project depended on the security situation in the area.

In response to these events, Total suspended the contract under a force majeure clause. The company has now decided to lift the clause and reinstate the contract. According to the Financial Times, it also informed the Mozambican government of the move. The government met on Tuesday, October 28, but has yet to decide whether to accept new terms involving a $4.5 billion increase in costs.

A promising but controversial project

The project has been described as potentially pivotal and transformative for Mozambique. In addition to Total, it was set to involve Japan’s Mitsui, several Indian companies and Thailand’s semi-state-owned energy company. It is expected to have a maximum capacity of up to 43 million tonnes of LNG per year.

The Mozambican and Rwandan governments have reportedly managed to secure the area, including the Afungi Peninsula, where the project is located, as well as the site of US company Exxon’s oil project.

The latest developments signal that the company is less concerned about the safety of its employees in the area. However, the project has also been dogged by controversy over the conduct of Mozambican soldiers guarding it, who have been accused of human rights abuses. Despite the calmer situation, the Islamic State in Mozambique remains active.