After years of uncertainty and a forced halt due to a brutal insurgency, the highly anticipated $20 billion liquefied natural gas (LNG) project in Mozambique, led by French energy giant TotalEnergies, is on the cusp of a restart. Mozambique’s Minister of Mineral Resources and Energy, Estevao Pale, confirmed on Monday that the government has successfully created the “necessary conditions” for the resumption of activities, signaling a pivotal moment for both the nation’s economic future and the global energy landscape.

TotalEnergies, which suspended construction in 2021 following a devastating Islamic State-linked attack near its Afungi site in northern Mozambique, has consistently expressed its intent to resume development this summer. The recent meeting between TotalEnergies’ CEO, Patrick Pouyanné, and Mozambique’s President, Daniel Chapo, on Thursday, July 10, underscored the high-level commitment to getting this colossal project back on track.

“It was a meeting with the perspective of restarting activities,” Minister Pale stated at an event in Inhambane province, referring to the crucial discussions held last week. “At the government level, all the conditions are being created to allow investors to restart activities as quickly as possible.” While TotalEnergies has refrained from official comment, sources close to the project indicate that internal preparations are well underway, with contractors reportedly receiving instructions to prepare for a return to the Afungi peninsula.

The Mozambique LNG Project: A Vision on Hold

The Mozambique LNG Project is not merely another energy venture; it is a cornerstone of Mozambique’s long-term economic development strategy and a significant player in the global energy transition. Located in Area 1 of the Rovuma Basin off the coast of Cabo Delgado province, the project holds approximately 65 trillion cubic feet (Tcf) of recoverable natural gas. This vast reserve positions Mozambique as a critical future supplier of natural gas, with the potential to become one of the world’s largest LNG exporters.

The project, which received its Final Investment Decision (FID) in 2019, is designed to include two liquefaction trains with an initial annual production capacity of 13 million tonnes per annum (MTPA), with an ambitious expansion capacity of up to 43 MTPA. TotalEnergies leads the consortium with a 26.5% stake, alongside key partners such as Japan’s Mitsui & Co. (20%) and various Mozambican entities, including the national oil and gas company, Empresa Nacional de Hidrocarbonetos (ENH).

The strategic importance of this project cannot be overstated. Mozambique’s geographical location offers efficient access to both the energy-hungry markets of Asia and the increasingly diversified European market, which seeks to reduce its reliance on traditional gas suppliers. The gas extracted here is intended to be liquefied and transported by sea, providing a flexible and reliable energy source globally. TotalEnergies CEO Patrick Pouyanné has set a target of 2029 for the commencement of LNG production from the site, a timeline eagerly watched by stakeholders worldwide.

The Shadow of Insurgency: Cabo Delgado’s Enduring Challenge

The journey of the Mozambique LNG Project has been marred by a severe and persistent insurgency in the northern province of Cabo Delgado. Since October 2017, the region has been plagued by attacks from Islamic State-linked militants, often referred to as Ansar al-Sunna or Al-Shabaab (though not directly affiliated with the Somali group). This conflict has had a devastating human cost, displacing over 1 million people and leading to widespread human rights abuses.

The direct trigger for TotalEnergies invoking “force majeure” and halting construction in April 2021 was a brutal attack on the nearby port town of Palma in March 2021. This coordinated assault resulted in at least 87 deaths and forced thousands to flee into the surrounding forests, highlighting the extreme security risks in the area. The scale and ferocity of the Palma attack sent shockwaves through the international community, prompting TotalEnergies to withdraw all foreign workers and suspend operations indefinitely.

Since then, significant efforts have been made to improve the security situation. The Mozambican military, supported by forces from Rwanda and the Southern African Development Community (SADC), has made considerable progress in reclaiming and securing key areas previously held by insurgents. While these interventions have substantially reduced the frequency and intensity of attacks, reports indicate that the insurgency has not been entirely eradicated, with sporadic incidents still occurring in some parts of the province. This ongoing, albeit diminished, threat remains a critical factor in the project’s long-term viability and the safety of its workforce.

Furthermore, the conflict has raised serious human rights concerns. There have been accusations against government soldiers tasked with protecting the gas site for alleged abuses against villagers fleeing the unrest. TotalEnergies itself, in November 2024, formally requested Mozambican authorities to open a formal investigation into these allegations, underscoring the complex interplay between security, human rights, and large-scale development projects in conflict-affected regions. Addressing these concerns transparently will be crucial for the project’s social license to operate and for fostering trust with local communities.

Economic Aspirations and Realities for Mozambique

For Mozambique, a nation with a significant portion of its population living in poverty (over 70%), the vast natural gas reserves in the Rovuma Basin represent an unparalleled opportunity for economic transformation. With over 100 trillion cubic feet (Tcf) of proven gas reserves, Mozambique ranks among the world’s largest holders of this valuable resource, often dubbed “Africa’s Qatar” due to its potential.

The International Monetary Fund (IMF) has projected that Mozambique could collect an astonishing $500 billion in revenue from LNG exports by 2045, a figure that could fundamentally reshape the country’s economic landscape. The IMF also anticipates that the commencement of onshore LNG production will accelerate Mozambique’s economic growth sharply, potentially reaching 10% in 2028 and 2029, a significant leap from an estimated 2.5% in 2025. Such revenues could be channeled into vital public services, infrastructure development, education, and healthcare, lifting millions out of poverty.

However, the path to realizing this potential is fraught with challenges. Despite the promise of massive revenue, concerns persist about the equitable distribution of wealth and the potential for a “resource curse,” where natural resource abundance paradoxically leads to corruption, inequality, and instability. Critics point to the current limited local job creation within the energy sector, with only an estimated 15% of the workforce being local. The displacement of thousands of communities to make way for project infrastructure further complicates the narrative, raising questions about the direct benefits for the affected populations.

To mitigate these risks and ensure broader societal benefits, the Mozambican government has committed to establishing a sovereign wealth fund to manage and invest the future gas revenues transparently and sustainably. Efforts are also underway to streamline regulations, eliminate bureaucratic bottlenecks, and promote local content development, ensuring that Mozambican businesses and citizens are actively involved in and benefit from the burgeoning energy sector.

Beyond TotalEnergies’ project, Mozambique’s gas potential is also being developed by other international players. Italy’s Eni successfully brought its Coral Sul Floating LNG (FLNG) project online in 2022, marking Mozambique’s debut as an LNG exporter. This offshore facility, with a capacity of 3.4 MTPA, is less exposed to onshore security risks and has provided valuable foreign exchange earnings. Additionally, US energy giant ExxonMobil is leading the Rovuma LNG project in Area 4, which is expected to reach its Final Investment Decision (FID) next year. This multi-billion-dollar onshore project, with an anticipated 18 MTPA capacity, further underscores the scale of Mozambique’s gas endowment. The distinction between these offshore and onshore projects is crucial, as the onshore facilities, like TotalEnergies’, are inherently more vulnerable to land-based security threats.

Global Energy Landscape: Why Mozambique Matters

The restart of TotalEnergies’ Mozambique LNG project holds immense significance for the global energy market, particularly in the context of evolving geopolitical dynamics and the ongoing energy transition. Global demand for LNG has been growing rapidly, driven by factors such as:

• Energy Security: Following recent geopolitical events, many nations, particularly in Europe, are actively seeking to diversify their energy supplies and reduce dependence on single sources, notably Russian gas. Mozambique’s strategic location offers a viable alternative, providing a stable and substantial source of LNG.
• Transition Fuel: While the world is moving towards renewable energy, natural gas is widely considered a crucial “transition fuel.” It burns cleaner than coal and oil, producing significantly fewer carbon emissions, making it an attractive option for countries aiming to reduce their carbon footprint while ensuring energy stability during the shift to renewables.
• Growing Demand in Asia: Emerging economies in Asia, such as China, India, and Southeast Asian nations, continue to drive global energy demand. Mozambique’s proximity to these markets makes it a highly competitive and efficient supplier.

However, Mozambique’s entry into the global LNG market is not without competition. Established players like QatarEnergy, with its massive North Field Expansion, and Australia, with projects like Wheatstone, continue to dominate the supply landscape. Nevertheless, analysts from Deloitte project that Mozambique could become a top 10 global producer, responsible for 20% of Africa’s total LNG output by 2040, solidifying its position as a major player.

Africa as a continent holds substantial untapped gas reserves, with countries like Nigeria, Senegal, and Mauritania also poised to contribute significantly to future LNG supply. Mozambique’s success could serve as a blueprint, attracting further investment into Africa’s energy sector and bolstering the continent’s role in meeting global energy needs.

The Path to Resumption: Diplomacy and Conditions

The recent meeting between TotalEnergies CEO Patrick Pouyanné and Mozambican President Daniel Chapo on July 10, 2025, was a critical step towards the project’s revival. President Chapo has been vocal about the need for TotalEnergies to formally lift the “force majeure” clause it invoked in 2021. This legal declaration, typically used in contracts to excuse parties from obligations due to unforeseen circumstances beyond their control, is a key hurdle for the project to officially resume. President Chapo emphasized that “What matters most right now with TotalEnergies is lifting the ‘force majeure’ and moving forward with the project. No matter how many development plans are signed, without lifting the ‘force majeure,’ we won’t be doing anything.”

TotalEnergies’ internal actions suggest that the lifting of force majeure is imminent. The company has reportedly sent “notice to proceed with site preparation” to key contractors, including Portuguese builder Mota-Engil SGPS SA and Besix Group, instructing them to mobilize resources back to the Afungi peninsula. This signals a concrete move towards reactivating the construction site.

Crucially, the project’s financial backing appears robust. In March 2025, the U.S. Export-Import Bank (Exim Bank) revalidated a substantial $4.7 billion loan for the project, a critical endorsement from a major international financial institution. Furthermore, a new financing package worth around $7 billion is reportedly under review, to be secured by other U.S. financial institutions. This strong financial commitment from international lenders indicates confidence in the project’s long-term viability, despite the past security challenges.

While the Mozambican government is creating the enabling environment, and financing is being secured, TotalEnergies still faces some remaining hurdles, which Pouyanné himself has referred to as “paperwork.” These likely include final contractual agreements with partners and contractors, as well as ongoing due diligence related to security and human rights. The ultimate decision to lift the force majeure rests with TotalEnergies and its consortium partners, contingent on their assessment of the sustained security improvements and the overall operational environment.

Future Outlook and Challenges

The long-term vision for Mozambique is ambitious: to leverage its vast gas reserves to become a regional energy hub and a significant global LNG exporter. Beyond the direct revenues, the gas sector is expected to stimulate ancillary industries, create skilled jobs, and foster the emergence of small and medium-sized enterprises (SMEs) across the Cabo Delgado province. The government’s plans to develop domestic gas allocations are vital, aiming to use the gas for power generation and industrial development within Mozambique itself, rather than solely for export. This could significantly boost local energy access and industrialization.

However, the journey ahead is not without its complexities. Governance issues, including historical challenges with corruption and public debt scandals, remain a concern. Transparent management of the anticipated vast revenues will be paramount to ensure that the benefits accrue to the broader population and are not siphoned off.

Environmental considerations also loom large. While LNG is cleaner than other fossil fuels, its extraction and liquefaction processes still contribute to greenhouse gas emissions. According to the World Bank, LNG projects in Mozambique could emit up to 4.5 billion tonnes of CO2 over their lifecycle. Mozambique faces the challenge of balancing its economic development aspirations with global climate commitments. Discussions are already underway regarding the integration of LNG projects with renewable energy initiatives, such as the planned 100 MW photovoltaic park near the Temane power plant, signaling a move towards a more diversified and sustainable energy mix in the long run.

In essence, the resumption of TotalEnergies’ Mozambique LNG project is more than just a corporate decision; it is a critical test case for large-scale energy investments in challenging environments. Its success will not only define TotalEnergies’ future in Africa but could also redefine the calculus of investing in the continent’s vast energy potential, offering a blueprint for balancing economic growth with security, governance, and environmental stewardship.

Conclusion: A New Dawn for Mozambique’s Energy Ambitions

The confirmed readiness of Mozambique to facilitate the restart of TotalEnergies’ $20 billion LNG project marks a significant turning point after years of suspension. This development, driven by improved security conditions and high-level diplomatic engagements, promises to unlock immense economic potential for Mozambique, positioning it as a major player in the global LNG market.

While challenges related to ongoing security, equitable wealth distribution, and environmental impact persist, the collective commitment from the Mozambican government and international energy partners signals a renewed determination to harness these vast natural resources. As TotalEnergies prepares to lift its force majeure and resume construction, the world watches keenly, anticipating a new dawn for Mozambique’s energy ambitions and a crucial addition to the global supply of liquefied natural gas.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

15th July, 2025