Minister says 'very positive' about resuming Mozambique LNG project construction this summer

Mozambique is "very positive" about resuming construction of the Mozambique LNG project this summer and expects "financial closure" for the second floating LNG unit at the Coral North project "probably next year," Minister of Mineral Resources and Energy Estevao Pale said June 20.

Speaking to reporters in Tokyo, Pale said, "We are making all efforts to resume the LNG project as soon as possible."

"We are very positive on that [resuming construction this summer]," he said, following a bilateral meeting with Minister of Economy, Trade and Industry Yoji Muto.

Pale is due to attend the LNG Producer-Consumer Conference hosted by METI and the International Energy Agency later in the day.

TotalEnergies declared force majeure on the project in April 2021 and withdrew all staff from the site on the Afungi Peninsula in response to a deterioration in the country's security situation.

When asked when the force majeure would be lifted, Pale said, "As soon as the operator thinks that there are conditions to restart, as the government, we are doing everything we can to resume the project as quickly as possible."

Asked whether TotalEnergies has sought government approval to lift the force majeure, Pale said, "Not yet."

"We are working together with all project partners to create security conditions favorable for restarting the project," he added.

As for the security conditions in the area, Pale said, "[Security] around the area has improved considerably and continues to improve."

TotalEnergies had initially hoped to produce the first LNG from the 13.1 million mt/year project in 2024, but the project was put on hold in 2021 due to the security situation.

TotalEnergies operates Mozambique LNG with a 26.5% stake. Its partners are ENH (15%), Mitsui (20%), ONGC Videsh (10%), Beas Rovuma Energy Mozambique (10%), BPRL (10%) and PTTEP (8.5%).

Japanese utilities are expected to offtake about 30% of the output from the Mozambique LNG project, marking Japan's first import of LNG produced in the Southeast African country, according to state-owned Japan Bank for International Cooperation, which provided financing for the project.

Tokyo Gas has a long-term LNG purchase contract to lift 2.60 million mt/year of LNG from the Mozambique LNG project, whereas Japan's JERA and Taiwan's CPC are set to lift a total of 1.6 million mt/year of LNG.

Coral North

When asked about the latest on the second FLNG at the Coral North project, Pale said, "The development plan was approved recently by the cabinet."

"There is a process we are following so that financial closure will happen as soon as possible -- probably next year," he added.

In Mozambique, ENI plans to take a final investment decision for the second FLNG unit at the Coral North project by the end of 2024, with an eye to "seeing the first LNG by the end of this decade," Cristian Signoretto , deputy chief operating officer of natural resources at ENI, told Platts, part of S&P Global Commodity Insights, in October 2024.

The second FLNG unit is going to be "a carbon copy of the first one," known as Coral South, with a 3.4 million mt/year capacity, Signoretto said. However, he added that it will be optimized to produce slightly more than the first unit, at 3.7 million mt/year, with ENI expecting to lift about 1.8 million mt/year of LNG for its equity entitlement.