(Oil Price) – The government of Mozambique disagrees with TotalEnergies’ estimate that the years-long delay in the Mozambique LNG project has cost it and its partners $2 billion in overruns, a source familiar with the matter told Bloomberg on Wednesday.
TotalEnergies and its partners in the $20-billion Mozambique LNG project had to suspend work and declare force majeure for several years amid serious concerns about security due to Islamist attacks near the site.
A recent audit report by UK-based consultancy Bayphase could not confirm the costs TotalEnergies claims to have incurred due to the delay. So Mozambique is not inclined to accept the $2-billion cost overrun estimate, according to Bloomberg’s anonymous source.
Mozambique has yet to approve an updated development plan for the massive LNG export project, which could transform the economy of one of Africa’s poorest countries and increase supply to the global LNG market in the medium to long term.
However, in order to approve the updated plan, Mozambique and the project developers need to be on the same page about costs. The government and the French supermajor continue discussions on the costs and the plan and they could still reach an agreement on how to proceed, Bloomberg’s source said.
After a five-year hiatus, in January 2026 TotalEnergies formally re-launched the Mozambique LNG project.
At the end of last year, TotalEnergies lifted the four-year-long force majeure on the Mozambique LNG project, which was stalled due to the precarious security situation near the site of the planned export facility. The project site is close to the town of Palma in the Cabo Delgado province, where Islamic State-affiliated militants were active for years.
In the spring of 2021, following Islamist militant attacks in towns close to the construction site, TotalEnergies declared force majeure and suspended works on the project. Mozambique LNG was Africa’s largest foreign investment when announced.
Due to the force majeure, the goal to achieve first LNG production has slipped, first to 2027, and later, to 2029.
By Tsvetana Paraskova for Oilprice.com
