Total to press on with Mozambique LNG project in spite of insurgency

MOZAMBIQUE – Total intends to continue its major gas project in Mozambique despite the armed insurgency that has plagued the country since 2017 as it trusts the authorities to ensure its safety, in return for a solid financial contribution.

Armed insurgency has been targeting the central government in Maputo in the Cabo Delgado province, where most of the major gas discoveries have been made in recent years.

The insurgency is led by al-Shabab, a group that pledged allegiance to the Islamic state in 2019 and who is increasing attacks in this predominantly Muslim region.

In August last year, the coastal town of Mocimboa da Praia temporarily fell into their hands following intense fighting against the regular army.

The port, used by the oil companies and their sub-contractors, is located 80km south of the Afungi Peninsula and houses the facilities of the liquefied natural gas project — Mozambique LNG — led by Total, which took over from Anadarko in September 2019.

Despite the budget cuts linked to the pandemic, Patrick Pouyanné, the chief executive of the oil giant, has made this major project a priority and closed a US$14.9 billion financing deal in July 2020 to carry it out.

With reserves estimated at 65 TCF (trillion cubic feet), the site should produce 13.1 million tonnes of liquefied natural gas (LNG) each year for at least twenty-five years — thanks to the exploitation of two offshore fields and the construction of two onshore liquefaction trains.

“Reserves estimated at 65 TCF (trillion cubic feet), the site should produce 13.1 million tonnes of liquefied natural gas (LNG) each year for at least twenty-five years”

Mozambique LNG will enable Total to considerably increase the gas proportion of its hydrocarbon production on the continent, which is currently rather low at around 25% and allow it to also take advantage of a dynamic Asian LNG market, accessible from the east of the continent.

“Security issues are being discussed with the authorities, notably the Ministries of Defence, Interior and Energy. Total does not use private armed security companies,” says Nicolas Terraz, the head of the exploration-production branch in sub-Saharan Africa, who follows the situation in Cabo Delgado daily and said the facility is currently safe.

After the attack on Mocimboa da Praia, Total and Maputo announced on August 25 that they had strengthened their agreement to protect gas installations in this politically sensitive region, which also includes the Rovuma LNG project, led by Eni and Exxon.

A first version of this agreement was signed on March 1, 2019 by Anadarko.

The new version provides for an increase in Total’s financial contribution to the authorities in exchange for better protection of its project infrastructures by the Cabo Delgado Joint Task Force, whose numbers were increased after the August 12 attack from 500 to some 3,000 men according to sources.

“Mozambique LNG is providing logistical support to the public security forces assigned to protect project activities in the form of vehicles, accommodation and food. Under this agreement, the operators pay the Ministry of Defence compensation for the protection missions carried out at the Afungi facility,” said Total at the time the agreement was signed.

“Each Mozambican military or police officer assigned to the protection of the facility receives VPSHR (Voluntary Principles on Security and Human Rights) training.

“Total is particularly vigilant about the proper application of these principles, and this subject is regularly raised with the authorities,” says Terraz.

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