TotalEnergies anticipates U.S. financing for its $20 billion Mozambique LNG project to be approved shortly, enabling the lifting of a force majeure status. CEO Patrick Pouyanne indicated that loan approvals from multiple countries are still pending. The project’s completion timeline will extend to 2029-2030 due to these delays.
TotalEnergies CEO Patrick Pouyanne announced that U.S. financing for the $20 billion Mozambique LNG project is anticipated to be approved within the next few weeks. Additional financing from other credit agencies is expected to follow in the months that ensue. The company can’t lift the force majeure imposed since 2021 until it secures re-approvals for loans from several countries, including the U.S., UK, and the Netherlands.
During a press briefing after presenting the fourth-quarter earnings, Pouyanne discussed the approval of prior loans, previously sanctioned during the Trump administration, which he expects to be reinstated swiftly. He also indicated that the timeline for project completion must shift from the original target of 2027 to a new estimate of 2029-2030 due to these delays.
The U.S. Export-Import Bank had initially approved a $4.7 billion loan for the project, but this funding requires re-approval as construction was halted in 2021 because of escalating violence in Mozambique’s Cabo Delgado region. Pouyanne noted that the UK’s financial commitment of approximately $800 million to $1 billion is also under review.
Pouyanne remarked on the UK’s dilemma, stating, “I am waiting to see how they will explain it to us” regarding the potential exercise of a legal right to withdraw from the agreement after already signing contracts related to financing. This reveals the complexities involved in international financing for such large-scale projects.
The Mozambique LNG project is a significant initiative that aims to exploit natural gas resources in the country. However, the venture has been hampered by a security crisis in the Cabo Delgado region, leading to a force majeure declaration since 2021. Financing from the U.S., UK, and other countries is critical for its development, as it involves substantial capital investment and international collaboration.
In summary, TotalEnergies is awaiting essential financing approvals from the U.S. and other nations to revive the stalled Mozambique LNG project. CEO Patrick Pouyanne expressed optimism for swift re-approval of previous financial agreements and acknowledged delays in completion due to ongoing geopolitical issues. The involvement of the UK and other credit agencies remains crucial for the project’s future viability.
Original Source: www.marketscreener.com