TotalEnergies’ LNG project facing longer delays

TotalEnergies said that its $20 billion Mozambique LNG project will not be operational by 2029 as initially planned, citing security concerns and the need to lift the force majeure declared on the project site. According to reports from Reuters, the French oil giant had hoped to restart construction by the end of 2024, which would have allowed the project to come online by 2029. However, the company faces significant challenges, including the re-approval of a critical $4.7 billion loan from the U.S. Export-Import Bank (EXIM).

The project, which has been stalled since 2021 due to violent unrest in the northern Cabo Delgado region, has yet to receive disbursements from EXIM as the loan has not been re-approved. TotalEnergies CEO Patrick Pouyanne emphasized in October that force majeure could only be lifted once the financing was fully secured. Three export credit agencies have yet to confirm their loans, even after TotalEnergies renegotiated new restart costs with contractors.

EXIM, which had initially agreed to finance the Mozambique LNG project under President Donald Trump’s administration, is still re-evaluating the amended loan package. The approval process has been delayed under President Joe Biden’s administration, which imposed restrictions on lending for overseas oil and gas projects. The situation is further complicated by leadership transitions at EXIM following the new Trump administration’s appointments.

Despite these obstacles, security conditions in the region have improved, with partner Mitsui indicating in December that final preparations were underway to resume construction. However, TotalEnergies is prioritizing peace and stability in Cabo Delgado before pushing forward with the project’s restart.

TotalEnergies holds a 26.5% operating stake in the Mozambique LNG project, which was originally expected to transform the southern African nation into a major LNG producer.