HomeBiggest projectsMozambique LNG, the first onshore LNG facility in the southern African country

Mozambique LNG, the first onshore LNG facility in the southern African country

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The Mozambique LNG project comprises the Golfinho-Atum gas field development in the offshore Area 1 Block of the deep-water Rovuma Basin and the construction of a 12.88 million tonnes per annum (Mtpa) onshore liquefied natural gas (LNG) facility on the Cabo Delgado coast of Mozambique. This will be the first onshore LNG facility in Mozambique.

Area 1 Mozambique LNG facility

The Golfinho and Atum gas fields are located in 1,600m-deep waters within the Rovuma Basin Area 1, approximately 40km off the coast of Cabo Delgado. The Offshore Area-1 is estimated to contain 75 trillion cubic feet (tcf) of recoverable natural gas resources. The LNG processing and export facility will be developed in the Afungi peninsula in Cabo Delgado, the northernmost province of Mozambique.

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The Area 1 Mozambique LNG facility will consist of two liquefaction trains with a combined nameplate capacity of 12.88Mtpa in the initial phase. It will also house gas pre-treatment facilities and full-containment LNG storage tanks. The LNG production capacity of the facility is proposed to be further expanded up to 50Mtpa in the future. The plant will receive feed gas supply from the Golfinho-Atum gas field through the pipeline and produce LNG for export to the Asian and European markets, as well as for domestic consumption in Mozambique.

Other support facilities for the LNG plant will include materials offloading facility and an LNG marine terminal capable of accommodating large LNG carriers, which will also be shared with upcoming Area 4 LNG projects.

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Reported earlier 

2011-2014

The environmental impact assessment (EIA) for the Area 1 Mozambique LNG project was carried out. The Mozambican Ministry of Coordination of Environmental Affairs (MICOA) approved the EIA report in June 2014.

2017. 

The concessions to design, build and operate the marine facilities for the project were secured by the Government of Mozambique in July 2017. 2018 The Government of Mozambique gave the final approval for the Area 1 Mozambique LNG development plan in March 2018.

Jun 2019.

Mozambique secures contract for construction of onshore liquefied natural gas

Mozambique secures contract for construction of onshore liquefied natural gas

Italian engineering, procurement, and construction (EPC) contracting giant Saipem, in a joint venture with America’s McDermott International and Japan-headquartered Chiyoda Corporation, has reached an agreement with Area 1 Concessionaires – a wholly owned subsidiary of Anadarko Petroleum Corporation for the development of Mozambique Area 1 Liquefied Natural Gas (LNG).

The joint venture project scope includes construction, procurement, and engineering for all components of the onshore LNG development, this includes two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum (MTPA) plus associated infrastructure and utilities.

“LNG is shaping an entirely new era of energy solutions and McDermott is playing a crucial role in this global shift. The project will be built based on McDermott’s industry-leading experience and ability to deliver EPC solutions globally,” said McDermott’s Senior Vice President for Europe, Africa, Russia, and Caspian Mr. Tareq Kawash.

Also Read: Undersea gas pipeline fires Egypt’s regional energy dreams

Mozambique Area 1 Liquefied Natural Gas (LNG)

Earlier the JV provided front-end engineering design (FEED) services for the LNG development. McDermott’s initial portion of the EPC contract award is about US $2bn. Saipem and McDermott have established a new office in Milan, Italy to lead in Engineering, procurement, and project management.

This will aid in sharing on-site construction management responsibilities, the new plan will also see McDermott perform engineering from both India, Gurgaon, and London. On the other side, Chiyoda will provide advisory services for the JV.

Construction works are expected to start when Anadarko issues a Notice to Proceed after it takes a Final Investment Decision (FID). In addition as the operator of  Offshore Area 1, Anadarko is the main project sponsor while other sponsors include Beas Rovuma Energy Mozambique Limited, ENH Rovuma Área Um, BPRL Ventures Mozambique B.V., S.A, PTTEP Mozambique Area 1 Limited, ONGC Videsh Ltd and Mitsui E&P Mozambique Area 1 Ltd.

Construction of first onshore LNG project in Mozambique to commence

Construction works of the Anadarko-led Area 1 Mozambique LNG project, the first onshore LNG in the country are set to commence. This is after Anadarko Petroleum Corporation, the co-ventures of the project announced a Final Investment Decision (FID) on the development.

The official declaration of FID was made at a sanctioning event in Maputo, Mozambique, attended by His Excellency the President of the Republic of Mozambique Filipe Nyusi, the Minister of Mineral Resources Ernesto Max Tonela, and Anadarko’s Chairman and CEO Al Walker, along with representatives from the Area 1 co-venturers and distinguished guests.

“This official declaration of FID confirms the Area 1 Plan of Development is now effective, with notice provided to the Government of Mozambique that all conditions precedent have been fulfilled, and the project can now advance to the construction phase,” said President Filipe Nyusi.

Also Read: Angola signs MoU to develop a liquefied natural gas plant

Mozambique Area 1 Liquefied Natural Gas (LNG)

The project is a joint venture between Italian engineering, procurement, and construction (EPC) contracting giant Saipem, in a joint venture with America’s McDermott International and Japan-headquartered Chiyoda Corporation, and Area 1 Concessionaires – a wholly owned subsidiary of Anadarko Petroleum Corporation for the development.

The project scope includes construction, procurement, and engineering for all components of the onshore LNG development, this includes two LNG trains with a total nameplate capacity of 12.88 million tonnes per annum (MTPA) plus associated infrastructure and utilities.

“LNG is shaping an entirely new era of energy solutions and McDermott is playing a crucial role in this global shift. The project will be built based on McDermott’s industry-leading experience and ability to deliver EPC solutions globally,” said McDermott’s Senior Vice President for Europe, Africa, Russia, and Caspian Mr. Tareq Kawash.

Earlier the JV provided front-end engineering design (FEED) services for the LNG development. McDermott’s initial portion of the EPC contract award is about US $2bn. Saipem and McDermott have established a new office in Milan, Italy to lead in Engineering, procurement, and project management. This will aid in sharing on-site construction management responsibilities, the new plan will also see McDermott perform engineering from both India, Gurgaon, and London. On the other side, Chiyoda will provide advisory services for the JV.

In addition as the operator of Offshore Area 1, Anadarko is the main project sponsor while other sponsors include Beas Rovuma Energy Mozambique Limited, ENH Rovuma Área Um, BPRL Ventures Mozambique B.V., S.A, PTTEP Mozambique Area 1 Limited, ONGC Videsh Ltd and Mitsui E&P Mozambique Area 1 Ltd. The final investment decision (FID) on the Mozambique LNG project, which is estimated to cost approximately US $20bn, was taken in June 2019. Construction works on the integrated LNG project were started in August 2019. The start of production is scheduled for 2024.

Aug 2019

Construction of Area 1 natural gas project in Mozambique soon to begin

Construction works on the Area 1 natural gas project in Mozambique is due to begin next President of the Republic, Filipe Nyusi announced the report. The Mozambican government and Area 1 block partners, led by the Anadarko Petroleum Corporation group, in Maputo, signed the final investment decision for the liquefied natural gas project.

Also Read:Angola signs MoU to develop a liquefied natural gas plant

The President said he will lay the foundation stone for the project on the 5th of August same day US group Anadarko Petroleum Corporation will inaugurate the village where the population of Palma district was affected by the ongoing operations in Cabo Delgado province will be relocated. The village is made up of 556 houses equipped with a water supply system, as well as health facilities, and infrastructure for teaching and sports, among others, according to the AIM news agency.

The Area 1 natural gas project will be located in the Rovuma basin, in northern Mozambique. The project development plan outlines two onshore liquefaction lines with an annual production capacity of 12 million tonnes of liquefied natural gas (LNG), as well as the construction of a domestic gas supply network. The project is a US $25bn investment to be funded with US $14bn from bank funds and US $11bn from the shareholders of the concession.

The Anadarko Petroleum Corporation in Mozambique, through its 100% controlled subsidiary Anadarko Moçambique Área 1, Ltd, operates the Rovuma Area 1 block, with 26.5%, in which its partners are ENH Rovuma Area Um, a subsidiary of Mozambican state-owned oil and gas company ENH, with 15%, Mitsui E&P Mozambique Area1 Ltd. (20%), ONGC Videsh Ltd. (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique BV (10%), and PTTEP Mozambique Area 1 Limited (8.5%). (Macauhub)

US Exim Bank to vote on US $5bn for Mozambique’s LNG project

U.S. Export-Import Bank has announced plans to vote on a US $bn direct loan for the development of a liquefied natural gas (LNG) project in Mozambique. The Bank said it has notified the U.S. Congress of the transaction, which will be ready for a final board vote in 35 days. If approved, the plan would further the Trump Administration’s “Prosper Africa” initiative, designed to boost trade with Africa.

The borrower would be Mozambique LNG1 Financing Company, which is owned by a group of sponsors, including Anadarko Petroleum Company which was recently acquired by Occidental Petroleum Corporation. Also Read: Phase1 of Takoradi-Tema Interconnection project in Ghana completed

Mozambique’s LNG Project

The loan will cater to exports of goods and services for engineering, procurement, and construction of the onshore LNG plant and related facilities. The plant will be located on the Afungi Peninsula in northern Mozambique. Construction works are set to take five years during which it will create 16,400 American jobs among suppliers in Texas, Pennsylvania, Georgia, New York, Tennessee, Florida, and the District of Columbia.

“America’s energy companies offer the best goods and services in the world. I am pleased that with this vote by the Exim board of directors, ‘Made in the USA’ products are poised to play an important role in the development of this important energy resource,” said US Trade Representative Robert Lighthize. The LNG project will additionally boost US exports to the Area 1 concession of the project in the Rovuma Basin, which covers around 10,000 sq km and is anticipated to supply up to 64 trillion cubic feet of gas.

May 2020

RMB confirms US $15bn funding for LNG project in Mozambique

South Africa’s Rand Merchant Bank (RMB) has confirmed a US $15bn funding for a liquefied natural gas (LNG) project in Mozambique. The Mozambique LNG project will be led by multinational French oil and gas company Total SA and is expected to generate upwards of US $40bn in revenue for the government over its lifespan.

According to Jonathan Ross, Head of Oil and Gas Coverage at RMB, which is part of a consortium of banks currently providing commitments to financing the project, it will be a remarkable achievement in the circumstances. The backdrop could not have been worse for Total and partners to raise huge volumes of long-tenor funding – the economic fallout of COVID-19 has put enormous pressure on banks’ funding and capital and has triggered an oil price crash.

“It is particularly encouraging to see rare progress for such a large and important project in what is a primary revenue generating industry in Africa. I commend Mozambique LNG and Total SA for continuing to invest in the project along the original timeline,” he added.

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Supporting gas developments in Mozambique

For RMB, the deal will follow other financing commitments in the Oil and Gas sector in Mozambique. The bank was a co-founder and added to initial commitments for the Coral South floating liquefied natural gas (FLNG) project located offshore Mozambique, the first FLNG project in Africa.

“Supporting gas developments in Mozambique and the potentially transformational impact on Mozambique and the region remains of key strategic importance to RMB and the FirstRand Group,” said Mr. Ross. He further added that, in addition to these projects providing a secure source of energy supply in the region, they will also provide a boost to the economy and provide employment. 

RMB is proud to play a role in these projects. RMB has also helped support SA procurement for the gas developments in Mozambique. SA will be a key source of goods and services for the Projects, as well as a potential destination for some of the gas produced. “These projects are also in line with FirstRand’s fossil fuels policy which has seen FirstRand moving its financing portfolio more towards natural gas, as a key transition fuel for the shift to lower carbon global energy supply,” affirmed Mr. Ross.

Jul 2020

AfDB to join landmark US $20bn Mozambique LNG financing

The African Development Bank (AfDB) has concluded its bid to co-finance the construction of Mozambique’s integrated Liquefied Natural Gas (LNG) plant by signing a senior loan of US $400m for the transformational project.

Mozambique LNG Area 1

The Mozambique LNG Area 1 Project, estimated to cost over US $20bn, is ranked Africa’s single largest foreign direct investment to date. It comprises a global team of energy developers and operators, led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, as well as Mozambique’s national oil and gas company, ENH. With the signing on 15 July, the Bank joins a global syndicate of commercial banks, development finance institutions, and export credit agencies to provide the requisite financing for the project.

A financial close is expected later in 2020. The project, which benefits from one of the world’s largest natural gas reserves off the coast of northern Mozambique, will be the country’s first liquefied natural gas development. It will initially consist of two LNG trains with a total capacity of around 13 million tons per annum. As well as being transformational for the energy sector in Mozambique, the project is expected to have broader socio-economic benefits for the country.

According to Abdu Mukhtar, the Director of the Bank’s Industrial & Trade Development Department, signing the Mozambique LNG Area 1 agreement heralds a new age of industrialization for Mozambique. Gas purchasers, such as fertilizer plants, have the potential for improving regional and global competitiveness,” he said. The project comprises both onshore and offshore components, which will be funded by a combination of equity, pre-completion cashflows, and over US $14bn in senior debt facilities. The senior debt consists of a mix of Export Credit Agency (ECA) direct loans, commercial bank loans, and the facility from the Bank, the only multilateral development institution involved in the project’s first phase.

Also Read: LNG Terminal to be built in Matola, Southern Mozambique

Wale Shonibare, the Bank’s Director for Energy Financial Solutions, Policy and Regulation, said the project would create a new energy model in Mozambique and help to electrify Southern Africa.” Through the availability of domestic gas, the project stands to facilitate the development of gas-fired electricity in Mozambique. This will play a key role in providing reliable and affordable energy for the country and the wider region,” said Shonibare.

The Bank played a crucial role in requiring compliance with strict environmental and social standards, in addition to working on SME and gender development in Mozambique and promoting adherence to international best practices. The Bank’s involvement is consistent with its country strategy in Mozambique, which aims to leverage natural resource development and investment in sustainable infrastructure. Overall, the project will improve livelihoods, spur economic growth and boost universal electricity access, in line with one of the Bank’s High 5 strategic priorities, Light Up and Power Africa, Bank officials said.

The Bank’s Acting General Counsel, Souley Amadou, commented that this is a first-in-class transaction that sets a new standard for mega-projects on the African continent. The collaboration and unity of purpose between the sponsors, Government of Mozambique, the financing parties, and advisors are truly remarkable.”

Aug 2020

Mozambique sign security pact to support US $20bn LNG project

The government of Mozambique has signed a security pact with Total to support the development of the US $20bn Mozambique LNG project amid an insurgency linked to the Islamic State.

According to the pact, a joint task force will ensure the security of Mozambique LNG project activities in the Afungi site, and across the broader area of project operations. Mozambique LNG will provide logistic support to the joint task force which will ensure human rights principles are respected. According to Ronan Bescond, country chair of Total in Mozambique, all parties involved in the project are committed to enabling steady progress towards the successful delivery of the project.

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Securing investments

Ernesto Tonela Mozambique’s energy minister mentioned that the agreement bolsters security measures and endeavors to create a safe operating environment for partners like Total, which enables their ongoing investment in Mozambican industry, small and medium enterprises,s and for communities.

Construction works at the country’s first onshore liquefied natural gas development had been stalled due to a coronavirus outbreak and lockdown measures. The project is expected to produce its first LNG cargo by 2024, through a two-train liquefaction plant. The project includes the development of the Golfinho and Atum fields, located within Offshore Area 1 – which holds over 60 trillion cubic feet of gas resources.

In September, the US through the International Development Finance Corporation (DFC) agreed to provide up to US $1.5bn in political risk insurance to support the commercialization of natural gas reserves in Mozambique’s Rovuma basin; a region ravaged by an Islamist insurgency for the past three years. The insurance is to cover the construction and operation of an onshore natural gas liquefaction plant and support facilities being developed by energy giants including American firm ExxonMobil, France’s Total, and Italian’s Eni.

In mid-September, Total CEO Patrick Pouyanné and Mozambican president Filipe Nyusi met to discuss an intensifying Islamic State-linked insurgency in the country’s north, where the project is located. The violence is now creeping towards the project; recent videos that appear to show abuses, including torture and executions of civilians, by Mozambique’s army suggest the Cabo Delgado province has become increasingly lawless.

In October, Bharat Petroleum Corporation (BPCL) tied up a 15-year long-term contract for 1 million tonnes per annum (mtpa) LNG from its much-awaited Mozambique project. BPCL owns 10% in the 12.88 mtpa project offshore the Mozambique basin where OVL and Oil India are the other consortium partners, while French energy giant Total is the operator.

Mid-Oct 2020

Siemens Energy to supply power generation equipment to Mozambique LNG Project

CCS JV, a joint venture between Saipem and McDermott has selected Siemens Energy to supply emissions-reducing power generation equipment and boil-off gas compressors for the Mozambique LNG Project on the Cabo Delgado province on Africa’s East Coast. The project, led by TOTAL E&P Mozambique Area 1, includes the development of offshore gas fields in Mozambique’s Area 1 and a liquefaction plant with a capacity in excess of 12 million tons per year.

As part of the contract, Siemens Energy will supply six SGT-800 industrial gas turbines that will be used for low-emissions onsite power generation. With more than eight million total fleet operating hours and more than 400 units sold, the SGT-800 turbine is ideally suited for power generation, particularly in LNG applications, where reliability and efficiency are critical. The 54MW turbine rating selected for this project has a gross efficiency of 39 percent. It is equipped with a robust, dry low-emission (DLE) combustion system that enables world-class emission performance over a wide load range.

Also Read: Construction of Menengaï Geothermal Power Plant in Kenya complete

Centrifugal compressors for boil-off gas (BOG) service

Siemens Energy will also supply four centrifugal compressors for boil-off gas (BOG) service. A key feature of these compressors is the inlet guide vane (IGV) system that allows for optimization of power consumption according to changes in operational parameters such as inlet temperature and outlet pressure.

The gas turbines are slated for delivery in the second half of 2021 and the first half of 2022. The delivery of the compressors is scheduled for 2021. The equipment order for the Mozambique LNG project comes just weeks after an agreement was signed between Total and Siemens Energy to advance new concepts for low-emissions LNG production. As part of the contract, Siemens Energy is conducting studies to explore a variety of possible liquefaction and power generation plant designs, with the goal of decarbonizing LNG facility development and operation.

In late October an executive from project operator Total confirmed that the project is on track to produce its first cargo in 2024 despite pandemic disruptions globally.

Mid-Dec 2020

Eximbank to provide US $500m for Mozambique LNG project

The Export-Import Bank of Korea (Eximbank) is set to provide US $500m in financial support for a major integrated liquefied natural gas (LNG) project in Mozambique. The project financing by the state-run lender is aimed at helping Korean companies successfully complete the construction of two LNG plants in the southern African nation.

Daewoo Engineering & Construction and a group of small- and medium-sized Korean firms are participating in the project. When the approximately US $23.5bn project is complete, about 12.9 million tons of LNG will be produced from the plants annually. This amounts to 23% of Korea’s annual LNG imports, the lender said.

Also Read: Siemens Energy to supply power generation equipment to Mozambique LNG Project

Supporting Korean companies to enhance global competitiveness

According to Eximbank, the project is expected to create 1,300 new jobs annually and promote foreign exchange earnings. “We expect two Korean shipbuilders ― Hyundai Heavy Industries and Samsung Heavy Industries ― to win orders for 17 LNG ships, though contract negotiations are still underway,” the bank confirmed.

It further added that its participation in the Mozambique LNG project is meaningful in that Africa comes with huge growth potential, as a number of countries are resource-rich. The financing also comes at a critical time when local companies are facing difficulties due to the global economic fallout of the spread of COVID-19 this year. Despite the lingering challenges, Eximbank reaffirmed its willingness to continue its support for Korean companies in order to enhance their global competitiveness, by offering timely financial assistance.

The Korean construction and equipment manufacturers taking part in the project plan to invest US $550m in the five-year project. A group of eight export credit agencies has joined the project across the globe. They include Eximbank, the Export-Import Bank of the United States, the Japan Bank for International Cooperation, and SACE from Italy.

In late December, Daewoo Engineering & Construction (E&C) announced that it had signed a contract for the construction of Mozambique LNG Area 1 which involves building two liquefaction trains and auxiliary facilities with an annual production capacity of 64 million tons at the Afungi Industrial Complex in Mozambique. It will take 33 months to complete them. Daewoo E&C will be tasked with the construction of key processes such as steel frames, machinery, piping, and electricity. The project is promoted by seven companies including global oil company Total of France and a state-run gas corporation in Mozambique. The main contractor of the project is CCS Joint Venture (JV). 2021

In January, Total-led Mozambique LNG Project announced that it has temporarily reduced its workforce on-site in response to the prevailing environment, including ongoing challenges associated with COVID-19 and the security situation in northern Cabo Delgado. The northern province of Cabo Delgado, which has major gas resources, has been the scene of a bloody jihadist rebellion for more than three years. However, in recent weeks there have been intensifying attacks near the gas site on the Afungi peninsula.

In late January, the president of French oil company Total and the Mozambican president agreed to further strengthen the security around the natural gas venture in Cabo Delgado. Rebel groups that have been terrorizing Mozambique’s northern province for three years have increased attacks in 2020 and have approached the construction site led by Total, leading to a slowdown in the project and the departure of staff at the end of the year. The armed violence in Cabo Delgado, northern Mozambique, is causing a humanitarian crisis with around 2,000 deaths and 560,000 displaced people, without housing or food, mainly in the provincial capital, Pemba.

Mid-February 2021

AfDB and Mozambique LNG Area 1 Project win multilateral deal of the year award

The Mozambique Liquefied Natural Gas (LNG) Area 1 Project and the African Development Bank (AfDB) have jointly received the prestigious Global Multilateral Deal of the Year 2020 award by the print and online publication Project Finance International (PFI). The project, the single largest foreign direct investment in Africa to date with a value of over US $24bn, will exploit Mozambique’s immense offshore natural gas reserves, which can potentially transform global energy markets.

The African Development Bank signed an agreement for a US $400m senior loan to finance the project in July 2020. In signing the loan agreement, the African Development Bank joined a global syndication of commercial banks and export credit agencies that are providing financing. This financing includes direct loans as well as export credit agency-covered loans with 16- and 18-year tenors.

The project is implemented by an international consortium of energy developers and operators led by Total as the operator of the project. It includes Mitsui, Oil India, Bharat Petroleum, PTTEP, Oil and Natural Gas Corporation (ONGC) and Mozambique’s national oil and gas company, Empresa Nacional de Hidrocarbonetos (ENH). The consortium is providing the balance of financing through equity. Financial closing on the project is expected in 2021.

Late February 2021

JBIC signs loan agreement for the development of the Mozambique LNG Project

The Japan Bank for International Cooperation (JBIC) has signed a loan agreement amounting to up to US $536m with MITSUI & CO., LTD for the development of the Mozambique LNG Project. The loan is co-financed with private financial institutions, bringing the total co-financing amount to US$ 894m equivalent.

For this project, MITSUI and Japan Oil, Gas and Metals National Corporation (JOGMEC), jointly with Total S.A. of France, Empresa Nacional de Hidrocarbonetos E.P. of Mozambique, and others, will develop the Golfinho/Atum gas field in the northernmost part of Mozambique; transport feed gas through a subsea gas pipeline to the onshore liquefaction plant to be constructed, and produce and sell liquefied natural gas (LNG) with an annual production capacity of 13.12 million tons.

In July 2020, JBIC signed a loan agreement in project financing with MOZ LNG1 FINANCING COMPANY LTD, the project company for this project.

Loan for Mozambique LNG Project

The loan is intended to finance the development of the gas field and production of LNG in the project through MITSUI. Japanese utility companies are expected to offtake approximately 30% of the LNG produced by this project. JBIC’s support for this project is therefore expected to contribute to securing stable supplies of LNG, which is an important energy resource for Japan.

JBIC will continue to actively support the development of energy resources by Japanese companies and financially assist in the securing of a steady energy supply for Japan.

About Japan Bank for International Cooperation

JBIC is a policy-based financial institution in Japan and conducts lending, investment, and guarantee operations while complementing the private sector financial institutions.

March 2021

Total suspends restart of works at Mozambique LNG project amid attacks

Total has postponed the restart of works at the Mozambique LNG project and is scrambling to evacuate staff from the area, after deadly attacks on a nearby coastal town of Palma. Attacks on the town, which serves as the hub for the project, began on the day that Total announced it would gradually restart work, citing government efforts to improve security in the area.

Total had announced a gradual resumption of works after the government of Mozambique initiated additional security measures on the Afungi Peninsula, in the northern province of Cabo Delgado. Also Read: TLOU Energy to raise US $2.6m for Lesedi power project

Special security zone

According to a press release from the Ministry of Mineral Resources and Energy, the government had declared the area of the Mozambique LNG Project as a special security zone. “A road map has been drawn up with measures and actions seeking to restore and strengthen security.

These measures include increasing the size of the contingent of the Mozambican defense and security forces stationed at Afungi. They will allow the gradual return of the workers who had been evacuated, and the resumption of construction activities,” read the statement.

The statement further added that control over the Afungi special security area continues to be guaranteed exclusively by the public security forces under the Memorandum of Understanding signed between the government and Total. The special security area covers the zone within a 25km perimeter around the LNG project.

Work on the multi-billion project was interrupted at the end of December 2020, due to security threats in the immediate vicinity. Since then the government and Total have been working to draw up a plan of action to strengthen the security around the site and the neighboring villages.

Mid-March 2021

ABB brought on board to power the Total-led Mozambique LNG project

CCS JV, comprising Saipem, McDermott, and Chiyoda, has signed a deal with ABB to provide comprehensive integrated and intelligent electrical systems for the Total-led Mozambique LNG project which is expected to start production by 2024. With an LNG capacity of approximately 13 million tonnes per annum, the current development will spearhead crucial economic and social investment for Mozambique.

ABB’s participation

ABB’s 26-month project will culminate in a significant installed base in Mozambique for ABB and will involve collaboration across multiple ABB divisions and regions, led by ABB in Singapore. Fourteen large onshore electrical houses (e-houses) or prefabricated electrical substation buildings (PESB) – specifically designed for oil and gas applications, will be built by ABB team in Singapore and transported to the Total-led Mozambique LNG project site.

According to Brandon Spencer, President of ABB Energy Industries, winning this project is a testament to ABB’s technical superiority in electrification technologies, as well as the company’s highly skilled management and engineering capabilities. “We are proud to be part of Africa’s economic growth story, especially Mozambique,” he said. Also Read: Malicounda power station project in Senegal to receive a bridging loan

The company will also integrate its electrical control and power management system alongside 110kV gas-insulated switchgear (GIS), medium voltage switchgear (33kV, 11kV), and low voltage switchgear.

Johan de Villiers, Global Vice President, Oil, and Gas commented that they have optim­­­­­­­ized and customized their solutions to meet the specific technical and capital expenditure requirements of the customer. “With ABB as the main original equipment manufacturer (OEM) for electrical systems, Mozambique LNG Project will benefit in terms of cost-efficiency, maintenance, service as well as upgrades and expansions,” he added.

Late March 2021

Construction works on the Mozambique LNG project to resume

The government of Mozambique and Total have announced that construction works on the Mozambique LNG project, on the Afungi Peninsula, in the northern province of Cabo Delgado will soon resume after additional security measures were put in place in the area.

Work on the multi-billion project was interrupted at the end of December 2020, due to security threats in the immediate vicinity. Since then the government and Total have been working to draw up a plan of action to strengthen the security around the site and the neighboring villages.

Also Read: ABB brought on board to power Total-led Mozambique LNG project

A special security zone

According to a press release from the Ministry of Mineral Resources and Energy, the government has declared the area of the Mozambique LNG Project a special security zone. “A road map has been drawn up with measures and actions seeking to restore and strengthen security. These measures include increasing the size of the contingent of the Mozambican defense and security forces stationed at Afungi. They will allow the gradual return of the workers who had been evacuated, and the resumption of construction activities,” read the statement.

The statement further added that control over the Afungi special security area continues to be guaranteed exclusively by the public security forces under the Memorandum of Understanding signed between the government and Total. The special security area covers the zone within a 25km perimeter around the LNG project.

“The Government of Mozambique is committed that the personnel assigned to the protection of Mozambique LNG shall act according to the Voluntary Principles on Security and Human Rights (VPSHR) and international human rights standards”, said a Total statement on the resumption of activities, insisting that the project itself “does not use the services of any armed private security suppliers,” the statement affirmed.

Total said that Mozambique LNG has satisfied all the conditions precedent and complied with all relevant statutory requirements for the first debt drawdown of the project financing signed on 15th July 2020 with eight export credit agencies, 19 commercial banks, and the African Development Bank. This first drawdown will take place at the beginning of April 2021.

The oil and gas company remains optimistic that the project will be able to deliver its first shipment of LNG in 2024.

A few days later, Total postponed the restart of works at the Mozambique LNG project and was scrambling to evacuate staff from the area, after deadly attacks on a nearby coastal town of Palma. Attacks on the town, which serves as the hub for the project, began on the day that Total announced it would gradually restart work, citing government efforts to improve security in the area.

In early April, Mozambique Army spokesman Chongo Vidigal said that the LNG project is beyond the reach of Islamic state-aligned insurgents. “It is protected. At no time was its integrity at stake,” he affirmed. It was also reported that an estimated 10,000 people fleeing the attacks in northern Mozambique have sought refuge in a village within the concession area of the project, with more still arriving.

According to a statement from the United Nations Office for the Coordination of Humanitarian Affairs, several thousands of people had sought refuge near the gas project, located about 8km south of the town that first came under attack on March 24. “The site is viewed as safe as there are hundreds of government troops stationed within the liquefied natural gas project to protect it,” read the statement.

April 2021

Total declares Force Majeure on Mozambique LNG project

Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, Total has confirmed the withdrawal of all Mozambique LNG project personnel from the Afungi site and declared force majeure on the project.

The total has further expressed its solidarity with the government and people of Mozambique and wished that the actions carried out by the government of Mozambique and its regional and international partners will enable the restoration of security and stability in Cabo Delgado province in a sustained manner.

Total E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total SE, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%).

Also Read: ABB brought on board to power Total-led Mozambique LNG project

The unrest in Northern Cabo Delgado

Early this year, Total announced that it has temporarily reduced its workforce on-site in response to the prevailing environment, including ongoing challenges associated with COVID-19 and the security situation in northern Cabo Delgado. The province which has major gas resources had been the scene of a bloody jihadist rebellion for more than three years.

However, in recent weeks there had been intensifying attacks near the gas site on the Afungi peninsula. Around the same period, Italian engineering giant Saipem said it was working closely with Total to “preserve” the value of Mozambique LNG after it declared force majeure on the project because of the deterioration in the security situation in the country.

In mid-May, the Confederation of Economic Associations of Mozambique (CTA) announced that Total has suspended contracts with at least two companies building infrastructure for the project. The companies include an Italian construction firm contracted to build a resettlement village and a Portuguese public works company tasked with building a new airport.

“The impact of the (jihadist) attacks negatively affected 410 companies and 56,000 employees. Small and medium-sized local enterprises have already lost US $90m,” CTA president Agostinho Vuma said. In early August, Security forces from Rwanda and Mozambique took the Mozambican port city of Mocímboa da Praia from insurgents, whose attacks in the area forced France’s giant TotalEnergies to suspend a US $20bn liquefied natural gas (LNG) project.

In late August, the president of the African Development Bank (AfDB) said that the Mozambique LNG project could be back on track within the next 18 months after African armies deployed to help quell an insurgency. According to the president, he did not expect the interruption to affect the LNG project’s long-term viability. Troops from Rwanda and member states from the Southern African Development Community (SADC) have since been deployed to support Mozambican forces to help put down the insurgency.

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