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Italy's Eni on track for 2022 startup at floating Mozambique LNG project

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Italy's Eni on track for 2022 startup at floating Mozambique LNG project

Highlights

Coral South to be first Mozambique project online

Despite recent Islamist violence in Mozambique

TotalEnergies' Mozambique LNG under force majeure

Italy's Eni is on track to start up its 3.4 million mt/year capacity Coral South floating LNG production facility offshore Mozambique in 2022, a company spokesperson said, despite the recent militant violence in the southeast African country.

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"We confirm that so far the violence in the north of Mozambique has not affected the Coral South project timeline and we confirm startup in 2022 as per schedule," the Eni spokesperson said.

More than 30 million mt/year of LNG production capacity is under development in Mozambique as the country looks to join the ranks of the world's biggest LNG exporters.

However, there are growing fears that the country's fledgling LNG industry could be 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.

For Eni, however, work is on schedule at Coral South, which moved to final investment decision in 2017 and will be Mozambique's first LNG project to come online.

It 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.

Security situation

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

TotalEnergies CFO Jean-Pierre Sbraire said on April 29 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 has been occupied by insurgents since mid-2020.