Mozambican President Daniel Chapo said he expects to soon conclude talks with TotalEnergies over the restart of a $20 billion (R354bn) natural-gas project that halted four years ago because of an Islamic State-linked insurgency.
Chapo earlier this month met with Total CEO Patrick Pouyanne to discuss resuming the project that has the potential to transform the economy of one of the world’s poorest countries, he said in a July 19 interview. Mozambique’s $900 million in bonds due 2031 rallied as much as 1.4% to the highest level since October, reaching 86.265 cents on the dollar by 12.28 pm in Maputo, the capital.
“I was with Mr. Pouyanne two weeks ago and things are going well,” Chapo said. “In August, we will close our talks” about when to restart the project, he said.
Total halted work on Mozambique LNG, located in the northeastern Cabo Delgado province, evacuated workers and declared force majeure in 2021 after an escalation in rebel attacks in the area.
The raids by the insurgents – which have since prompted the deployment of troops by both Rwanda and, for a while, Mozambique’s neighbors to assist – drained momentum from the development of $50bn worth of liquefied natural-gas projects, with Eni and Exxon Mobil also developing plants.
“We have the small problem of jihad, terrorism,” Chapo said. In an earlier interview with Bloomberg in Spain, the president said that the while the region is more stable than four years ago, it isn’t “heaven,” but urged a restart nevertheless.
Chapo was scheduled to meet Pouyanne in Maputo, Mozambique’s capital, on July 10. Companies working on the construction of Total’s plant have begun preparing to resume operations, according to people familiar with the matter, while Eni is said to have awarded a contract to Samsung Heavy Industries to build its Coral North floating plant, adding to its $7bn Coral South facility, which is already operational.
The gas reserves discovered 15 years ago off Mozambique’s northeastern coast are among the world’s biggest.
BLOOMBERG
