Mozambique: TotalEnergies’ restart could ‘facilitate’ Exxon’s final investment decision – Fitch

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Mozambique: TotalEnergies’ restart could ‘facilitate’ Exxon’s final investment decision – Fitch

11:01 CAT | 26 Mar 2025

File photo: Lusa

Financial rating agency Fitch says the resumption this year of TotalEnergies” Liquefied Natural Gas (LNG) project in Mozambique will “facilitate” ExxonMobil’s long-awaited decision on another mega-project in the north of the country.

“The resumption of construction on TotalEnergies’ LNG project could facilitate a final investment decision [FID]on a proposed USD30 billion LNG project by ExxonMobil. This project would be partly onshore and would contribute to economic growth during its construction stage ,” reads an assessment by Fitch Ratings, consulted by Lusa.

The rating agency adds that the production capacity of this ExxonMobil project “ct could be the largest so far in Mozambique, with a total capacity of 18 million tonnes per annum (mtpa), compared with 12.9 mtpa for the TotalEnergies project”, with production “expected to start after 2030”-

TotalEnergies, leader of the Area 1 consortium, is developing the construction of a plant in Afungi, near Palma, for the production and export of natural gas.

This is one of the three projects under development in Mozambique, suspended since 2021 due to the terrorist attacks in Cabo Delgado, which led the oil company to invoke the force majeure clause and withdraw all staff from the construction site, but which it is preparing to resume while finalising the financing contracts.

READ: US loan could improve Mozambique’s LNG prospects:- Fitch Ratings

In October, ExxonMobil chose the Americans from McDermott as a consortium to prepare the engineering design for its natural gas production megaproject in Mozambique, to be completed this year, before the final investment decision (FDI).

According to information from the US consultancy, McDermott was then chosen to lead the consortium, which also included Saipem and China Petroleum Engineering and Construction Corporation. Since then, it has taken up to 16 months to finalise the technical and engineering design, known as FEED (Front End Engineering Design), for the Rovuma LNG project.

“The Rovuma LNG Phase 1 project represents a significant development for the country and provides a significant opportunity for economic growth. The project includes the liquefaction and export of natural gas extracted from the offshore Area 4 fields off the Afungi peninsula in Mozambique [Cabo Delgado],” according to a statement from McDermott.

In addition to ExxonMobil, the consortium includes Italy’s Eni and China’s China National Petroleum Corporation (CNPC), which hold a 70% stake in the Area 4 Exploration and Production Concession Contract.

The vice-president of the US oil company, Walter Kansteiner, said on 23 September in New York, after meeting then Mozambican President Filipe Nyusi, that ExxonMobil expects to complete the technical design of this project within a year.

“We’ve announced our FEED – Front End Engineering Design, our front end engineering and design [of the project], and that takes about a year. So we’re looking forward to progress on FEED over the next 12 or 13 months,” said ExxonMobil’s vice president for external relations.

Exxon’s project in Cabo Delgado — a northern province affected by terrorist attacks seven years ago — was initially expected to produce 15.2 million tonnes of gas a year, but this has since been revised to 18 million tonnes.

ExxonMobil’s general manager in Mozambique, Arne Gibbs, had said on 3 May that a decision on the investment could be made by the end of 2025.

The Rovuma LNG project will be “the largest liquefied natural gas project in Africa and could be the largest project in African history,” Gibbs added.

Mozambique has three development projects approved to exploit the natural gas reserves of the Rovuma basin, classified among the largest in the world, off the coast of Cabo Delgado. One project, by TotalEnergies, is still suspended due to security issues, and it is also on the Afungi peninsula.

Source: Lusa