Clouds Thicken Over Africa’s Biggest LNG Project

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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By Irina Slav – Feb 13, 2025, 5:00 PM CST

TotalEnergies in 2021 declared force majeure on work on the facility amid intensified fighting between local political factions.
At the end of last year, the French supermajor tried and failed to convince the outgoing Biden administration to release some $5 billion in state loans for Mozambique LNG.
Originally, TotalEnergies was supposed to start shipping LNG from the facility in 2024.

Mozambique LNG, a project with a price tag of $20 billion, may never see the light of day despite the bullish outlook for LNG demand. It seems that not everyone has heard the news that the world is going to need even more LNG in the future.

Work on Mozambique LNG has been suspended since 2021 when project lead TotalEnergies declared force majeure on work on the facility amid intensified fighting between local political factions. Now, it is planning a restart—and it is facing the consequences of years of transition campaigning.

First, at the end of last year, the French supermajor tried and failed to convince the outgoing Biden administration to release some $5 billion in state loans for Mozambique LNG. This is hardly a surprise given the Biden admin’s attitude to natural gas and LNG. The problem is that it is unclear whether the Trump admin would be willing to release the money given President Trump’s focus on American-produced energy, as noted in a recent update on Mozambique LNG by climate think tank the International Institute of Energy Economics and Financial Analysis.

“In January, President Donald Trump signed the Unleashing American Energy executive order, which ended the pause on further LNG export permits,” the IEEFA wrote. “Does this fit with US funding for a French, Japanese, Indian and Thai project, particularly in the context of questionable long-term LNG demand?”

This is certainly a pertinent question, at least in its first half. As for the questionability of long-term demand for liquefied natural gas, it seems there is a pretty strong case for it in the context of current price trends in Europe. This week, gas prices reached the highest since 2023 as peak seasonal demand drove gas stocks lower, deepening fears Europe may end winter with depleted reserves—and then need to refill them.

LNG demand is strong and about to get stronger as more supply comes online, despite the IEEFA’s—and other transition outlets’—insistence that the world is moving away from hydrocarbons. Despite all the efforts put into that move, even coal demand is still growing on a global level, after all.

However, the Mozambique LNG case is complicated because of the security situation in that part of the country—and the fact that the original financial backers of the project include pro-transition governments such as Keir Starmer’s in Britain. That government is reportedly looking for ways to get out of its loan obligation for Mozambique LNG because its transition agenda no longer fits with the project and, quite likely because money is finite and it needs all it can find to pour into that agenda.

Northern Mozambique has been struggling to contain an Islamist insurgency. It was the reason why TotalEnergies put the LNG project on hold back in 2021. Now, the situation is improving with the help of the Rwandan authorities—and Rwandan troops, financed by the European Union, which has the most interest in the project restarting. Yet not all is controversy-free around this deployment, and European capitals are locking horns over the alleged involvement of the Rwandan army in support of rebel groups in the Democratic Republic of the Congo. The allegations have already prompted protests in Brussels and calls for sanctions—as if Mozambique LNG needed any further complications.

In the end, however, demand for energy would have the final say. Originally, TotalEnergies was supposed to start shipping LNG from the facility in 2024. Now, Rystad Energy projects the start date could be delayed to 2030. Yet if LNG demand does boom as expected, it will justify the $20-billion investment in the project and any additional investments that need to be made to ensure a secure environment for the facility. In the end, it’s all about energy supply security.

By Irina Slav for Oilprice.com

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