French energy group Total on Monday declared force majeure on its $20 billion Liquefied Natural Gas (LNG) project in Mozambique and withdrew all personnel from the site after insurgent attacks last month.
Declaring force majeure implies a weightier suspension and allows Total to cancel contractors.
Dozens of civilians were killed in March in the coastal Mozambique town of Palma, near gas projects worth $60 billion that are aimed to transform Mozambique’s economy.
The attacks have dealt a blow to plans by Total and rival Exxon Mobil, which also has an LNG project in Mozambique, to turn the African nation into a major LNG producer to Australia, Qatar, Russia and the United States.
It also comes as major energy firms reassess their approach to LNG, once seen as a fuel of the future because it has lower emissions than coal or oil but now subject to re-evaluation in the drive to cut carbon emissions even more deeply.
“Considering the evolution of the security situation … Total confirms the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation leads Total, as operator of Mozambique LNG project, to declare force majeure,” the company said.
Total, which aimed to produce its first cargo from the project in 2024, suspended work on March 27 after the militant attack.
Insurgent attacks in Palma, northern Mozambique:
Force majeure was “the only way to best protect the project interest until work can resume,” a Total spokesperson added.
Mozambique President Filipe Nyusi this month said the government would work to restore peace in the country after last month’s militant attack near the multibillion-dollar gas projects backed by global oil companies. read more
The Mozambique government is due to hold a news conference on the situation on Monday morning.
The LNG project includes the development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession and the construction of a two-train liquefaction plant with a capacity of 13.12 million tonnes per annum (mtpa).
Total is the operator of the Mozambique LNG project and obtained a $14.9 billion debt financing package in July to fund its rollout.
Institute of Security Studies concerned over the growing insurgency in Mozambique:
