London — The latest attacks by Islamist militants in northern Mozambique, which left eight contract workers dead, have raised further the risk associated with the country's plans to become a major LNG exporter amid an increasing insurgency in the country.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The attack on a vehicle in late June in Cabo Delgado province carrying workers from Fenix Constructions, a third-party contractor involved with work at Total's planned 12.9 million mt/year Mozambique LNG project, only came to light this week.
The attack near the town of Mocimboa da Praia -- just 60 km (37 miles) from the site of Mozambique LNG and another high-profile development Rovuma LNG -- was carried out in tandem with another attack on Mocimboa da Praia itself, the second this year.
According to a Fenix statement, the attackers were wearing military fatigues that resembled those worn by the Mozambican government forces. Three workers are still missing, while three others escaped, Fenix said.
A Total spokeswoman told S&P Global Platts July 7 that while Fenix is a third-party contractor of some subcontractors to the Mozambique LNG project, it was not carrying out work for the project at the time of the incident.
"The event was not related to any activity carried out by the Mozambique LNG project and took place approximately 60 km away from the LNG project construction site," the spokeswoman said.
More than 30 million mt/year of LNG production capacity is under development in Mozambique as the southeast African country looks to join the league of the world's biggest LNG exporters.
But senior Africa analyst at global risk consultancy Verisk Maplecroft, Ed Hobey-Hamsher, said July 7 the attacks could undermine confidence in the Mozambique security forces.
"If state forces are not guarantors of security, we will see international oil companies increasingly dependent on private military contractors and local communities arming themselves and forming informal militia," Hobey-Hamsher said.
The attack was suspected to be part of the Ahlu Sunnah Wa-Jamo (ASWJ) Islamist insurgency in Mozambique that began in October 2017.
Hobey-Hamsher said if the kidnapped workers had been seized by ASWJ militants for "kidnap for execution" propaganda, it would suggest the group is increasingly committed to an Islamist jihadist ideology.
"Demands for ransom payments, on the other hand, would suggest that ASWJ is still primarily driven by criminal purposes," he said.
As well as Mozambique LNG, ExxonMobil is developing the 15.2 million mt/year Rovuma LNG facility close to the Total project, though the US group has deferred final investment decision on its development until at least 2021.
Italy's Eni is also operator of a smaller 3.4 million mt/year capacity floating Coral LNG project, which could begin operations in 2022.
Hobey-Hamsher said Mozambique still benefited from a low breakeven price, gas in a single location, and relative proximity to Asian and European markets "despite the deterioration in security in Cabo Delgado."
In March 2020, militants seized the town of Mocimboa da Praia before security forces pushed them out.
Before that, the closest the militants had got to the LNG sites was in February 2019 when workers for the then-operator of Mozambique LNG -- US-based Anadarko Petroleum -- were attacked in two related incidents, the first to directly impact the country's nascent LNG sector.
Anadarko later sold the asset to Total.