Communication - Presse

BMI Consultancy: “Prospects for Gas Improve with TotalEnergies’ potential Return to Mozambique in 2024”

onsulting firm BMI said on Wednesday 23 August that the outlook for natural gas projects in Mozambique is improving, despite the delay in the resumption of work in Cabo Delgado by France’s TotalEnergies.

In a note on the natural gas sector in the Rovuma basin, the consultancy’s analysts write that “the outlook for the mega-projects in Mozambique is improving, with progress being made on the resumption of these projects”.

“TotalEnergies has taken several steps to restart the project, following the violence in 2021, which forced the company to declare ‘force majeure’ and suspend construction activities” of the plant that will liquefy the gas, allowing it to be exported.

In the analysis, sent to investors and to which Lusa has had access, the analysts from this consultancy owned by the same people as the financial rating agency Fitch Ratings say that TotalEnergies should restart work in the first half of next year, after renegotiating contracts with local contractors.

“The final consideration for relaunching the project is to renegotiate costs with local contractors,” they write, pointing out that “since the project was suspended, there have been several large price rises for raw materials, energy and labour,” as well as a general increase in inflation, “which will decrease the project’s profit margins.”

Despite the increase, the CEO of French oil company TotalEnergies, Patrick Pouyanné, “confirmed that none of the old gas buyers have exercised their right to leave the project and indicated that there is still strong demand even if they leave”.

Mozambique has three development projects approved to exploit the natural gas reserves in the Rovuma basin, which are classified among the largest in the world and are located off the coast of Cabo Delgado province.

Two of these projects are larger and involve channelling the gas from the seabed to land, cooling it in a plant and then exporting it by sea in a liquid state.

One is led by TotalEnergies (Area 1 consortium) and work progressed until it was suspended indefinitely after the armed attack on Palma in March 2021, when the French energy company declared that it would only resume work when the area was safe. The other is the still unannounced investment led by ExxonMobil and Eni (Area 4 consortium).

A third completed, smaller project also belongs to the Area 4 consortium and consists of a floating platform for capturing and processing gas for export, directly at sea, which started up in November 2022.


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