French group TotalEnergies has officially requested a ten-year extension from the Mozambican government for its operating licence on the liquefied natural gas project located in the Cabo Delgado province, in the northeast of the country. The request also includes a claim for $4.5 billion (€4.26bn) in compensation, which the company says corresponds to the cost overruns caused by the project’s suspension since 2021.
The project, valued at $20 billion (€18.9bn), was halted following an armed attack that resulted in over 800 deaths. The French firm considers these events to fall under force majeure, which it argues justifies a revision of the original plan and an extended production period to offset the initial investment.
TotalEnergies adjusts its timeline and budget
In a letter dated October 24 addressed to the President of Mozambique, TotalEnergies stated that the first shipment of gas, originally scheduled for July 2024, is now postponed to the first half of 2029. The company believes this new timeline requires updates to the operational programme, the overall budget and the contractual conditions.
The project, considered the largest in Africa in the liquefied natural gas sector, had been suspended after a jihadist attack in the town of Palma. Despite gradual improvements in security, the company had until now not formally lifted the force majeure clause, which had blocked any effective restart of the works.
A pending decision from the Mozambican government
TotalEnergies indicated that one last step remains: the Mozambican Council of Ministers must approve an addendum to the development plan. This addendum would include the financial and technical adjustments needed to restart the site. The Mozambican government has not yet issued an official response to the request.
Meanwhile, Mozambique’s President Daniel Chapo is currently visiting the United States, where he is scheduled to meet with executives from ExxonMobil. The American group is planning to launch another gas project in the country, Rovuma LNG, but its final investment decision remains contingent on the full lifting of the force majeure at the TotalEnergies-operated site.
A strategic gas market for southern Africa
These projects could position Mozambique among the world’s top ten gas producers by 2040, according to a report published in 2024 by audit firm Deloitte. The country would then account for up to 20% of Africa’s production. Mozambique’s gas potential is attracting strategic competition among major energy companies, although security risks and rising costs remain significant challenges.
The Mozambique LNG project by TotalEnergies, along with ExxonMobil’s Rovuma LNG, forms part of a broader regional effort to exploit large-scale gas resources. Their implementation, however, depends on the ability of local authorities to guarantee the security and regulatory stability required for investments of this magnitude.
