Mozambique Engages TotalEnergies on Revised LNG Project Terms Following Cost Surge

The French oil major told Mozambique's president last week that the Mozambique LNG consortium estimated its costs had risen by $4.5 billion in the four years the project has been on hold because of an Islamist militant attack in 2021.

TotalEnergies and its partners want the development and production period extended by 10 years as partial compensation.

On the proposal to extend the period of the contract, Chapo said: "We will have to sit down and perceive in detail the foundations for this extension, ... there may also be counter-arguments from the government."

Mozambique will conduct a similar exercise on the higher costs proposed by TotalEnergies, and "on our side, there will also be, without any doubt, counter-arguments," Chapo said, according to a recording of remarks he made at a press conference that was shared with Reuters by Chapo's spokesperson.

TotalEnergies was not immediately available for comment.

Chief executive Patrick Pouyanne told investors that the Mozambique LNG consortium would be able to restart its project quickly, with a budget of $20.5bn.

The LNG project is 40% complete, although insurgent attacks have shown little sign of abating despite Mozambique signing a new security pact with Rwanda, whose military has helped secure the area where the plant is being developed.

Exxon Mobil is developing a separate project nearby.