The US Export-Import Bank has approved a $5 billion loan for the Mozambique LNG project led by TotalEnergies, aiming to restart the halted $20 billion venture. The project, facing delays due to security concerns, seeks further support from UK and Dutch agencies. Environmentalists voice objections over the project’s risks.
The Mozambique LNG project, led by TotalEnergies, receives a $5 billion loan from the US Export-Import Bank, indicating a revival of the halted $20 billion project. This follows a prior commitment of $4.7 billion during President Trump’s administration, which was reassessed amidst security issues in Cabo Delgado province that led to suspension in 2021.
TotalEnergies CEO Patrick Pouyanne is optimistic, as he expects additional support from other credit agencies. The project remains under scrutiny, pending loan reapproval from export credit agencies in the UK and the Netherlands. Mozambique’s Energy Minister, Estevao Pale, expressed hope for reaffirmed backing from these countries.
Initiated in 2010 following substantial natural gas discoveries, the project estimates 65 trillion cubic feet (tcf) of recoverable gas and plans to construct two liquefaction units with a possible capacity extension from 13 million tonnes per annum (mtpa) to 43 mtpa. However, insurgency related to the Islamic State has previously stalled progress due to security risks.
With improved security conditions, partner company Mitsui is preparing to resume construction after negotiations with contractors. Nonetheless, environmental and human rights advocates argue that the security concerns and socio-economic implications of the project should deter investment.
The Mozambique LNG project’s financing and anticipated resumption highlight key developments in securing substantial investments despite prior challenges. The loan from the US Export-Import Bank is a crucial step towards advancing the project. However, ongoing concerns about security, environmental impact, and human rights violations remain critical points of contention, influencing future support from international credit agencies.
Original Source: www.offshore-technology.com
