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Mozambique on track for 2022 startup at Coral South LNG project: minister

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Mozambique on track for 2022 startup at Coral South LNG project: minister

Highlights

Coral South to be first Mozambique project online

Despite recent Islamist violence in Mozambique

TotalEnergies' Mozambique LNG under force majeure

Commercial production at the 3.4 million mt/year capacity Coral South floating LNG production facility offshore Mozambique is on track to start as planned in 2022, according to the country's energy minister Ernesto Max Elias Tonela.

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In a pre-recorded video address ahead of the Japan-hosted 10th LNG Producer-Consumer Conference on Oct. 5, Tonela said Mozambique was also making progress in improving the security situation in the country, which has been hit by recent militant violence.

"Commercial production remains a target for 2022. This is the very first step, but a significant step, for Mozambique to join the LNG producing countries," Tonela said.

More than 30 million mt/year of LNG production capacity is envisaged in Mozambique, but the fledgling LNG industry has been in part derailed by the growing Islamist insurgency that began in October 2017.

In late March, dozens of people were killed during attacks on the town of Palma, prompting France's TotalEnergies in April to declare force majeure on work at its nearby 13.1 million mt/year Mozambique LNG project.

Work is on schedule at the Eni-operated Coral South, however, partly as it is an offshore project.

Coral South -- which moved to final investment decision in 2017 -- is based on the 450 Bcm of resources in the Coral field in Area 4 offshore Mozambique.

In 2016, Eni and its Area 4 partners signed an agreement with BP to take the entire volume of LNG to be produced by Coral South for over 20 years.

Tonela said the floating LNG vessel for the project was due to arrive later this year from a shipyard in South Korea.

Security situation

While Coral South proceeds as planned, the two other planned projects face delays.

TotalEnergies CFO Jean-Pierre Sbraire said in April that its Mozambique LNG project would be delayed by "at least a year" because of the security situation.

The company had targeted first LNG from the project in 2024.

The planned ExxonMobil-led 15.2 million mt/year Rovuma LNG facility, meanwhile, remains on hold with no final investment decision yet.

Both are located in northeastern Mozambique, close to the town of Palma and around 60 km from the port town of Mocimboa da Praia, which until recently was occupied by insurgents.

Tonela said progress was being made to improve security to allow TotalEnergies to resume work at Mozambique LNG.

"We are fully committed to restoring a sustainable security situation so that we can resume the project as soon as the situation allows," he said.

Tonela said Mozambique had received "strong support" from Rwanda in fighting the insurgency, enabling government to retake Mocimboa da Praia.

"This is significant progress that we have made with international support, and we are improving the security situation every day," he said.

Tonela added that Mozambique was working to establish further security around the site of Mozambique LNG on the Afungi peninsula.