Cape Town — Mozambique’s government may have counter-arguments to the updated budget and schedule proposed by TotalEnergies for the liquefied natural gas (LNG) project it is leading in the Southern African country, President Daniel Chapo said.
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 on Thursday that the Mozambique LNG consortium would be able to restart its project quickly, with a budget at $20.5 billion.
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.
Reporting by Wendell Roelf; Additional reporting by Manuel Mucari; Editing by Alexander Winning an Kim Coghill – Reuters
