TotalEnergies is nearing completion of $15 billion in financing to restart its Cabo Delgado natural gas project, boosted by support from US Exim Bank. The project has been suspended since 2021 due to security issues, but financing commitments continue to emerge. TotalEnergies’ production timeline has now been extended to between 2029 and 2030, highlighting ongoing challenges in the region.
TotalEnergies has announced that it is nearing completion of the $15 billion financing required to resume its natural gas exploration project in Cabo Delgado, Mozambique. This follows confirmation of support from the United States Export-Import Bank (Exim). Maxime Rabilloud, TotalEnergies’ director for Mozambique, stated that while the project remains in a state of force majeure and has not yet restarted, this financing is a critical step forward.
On March 13, Exim Bank reaffirmed its commitment of $4.7 billion towards the project, significantly aiding in securing the necessary funds. TotalEnergies, as the leader of the Area 1 consortium, is focused on building a plant in Afungi to facilitate the production and export of natural gas. Since 2021, the project has been suspended due to terrorist activity in the region, compelling the company to withdraw its personnel.
The financing was contingent upon improved security, which has received support from the Rwandan armed forces. Rabilloud noted that the overall funding package involves several international banks with approximately $5 billion confirmed by Asian banks. A final confirmation from European banks is yet to be received. TotalEnergies’ CEO, Patrick Pouyanne, communicated that delays had pushed the expected production start date to between 2029 and 2030, suggesting further setbacks than anticipated.
He previously indicated that the project should ideally restart in 2024, but this goal has not been met. The Mozambican president, Daniel Chapo, has been assured of TotalEnergies’ commitment to the project’s resumption. While Pouyanne acknowledged ongoing improvements in security, he cautioned that the situation remains precarious, referencing the impact of terrorist activities linked to the Islamic State on local communities.
This significant gas project, aimed mainly at supplying Asian markets, has a critical stake from TotalEnergies at 26.5% alongside local partners and Mitsui from Japan, which owns a 20% share. Mozambique’s Rovuma Basin is recognized for its large untapped natural gas reserves, with three projects currently approved for exploitation.
In conclusion, TotalEnergies is on the verge of finalizing $15 billion in financing to resume its natural gas project in Mozambique, largely due to assurances from the US Exim Bank. While the project has faced historical setbacks due to security concerns, new funding confirmations signal hopeful progress. Yet, the timeline for starting production remains uncertain. Overall, the commitment from TotalEnergies and its partners underscores the importance of security improvements in the region for the project’s future.
Original Source: clubofmozambique.com
