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Mozambique: Total’s force majeure on LNG shows external intervention is needed

By David Whitehouse
Posted on Tuesday, 27 April 2021 13:22

REUTERS/Charles Platiau

Total’s declaration of force majeure in Mozambique shows that the viability of onshore liquefied natural gas (LNG) development in the north of the country depends on external military intervention.

The declaration follows the withdrawal of all project personnel from the Afungi site, Total said in a statement 26 April. The company had already suspended plans to resume construction in late March after the insurgents attacked the nearby town of Palma.

Total last year signed a $14.9bn senior debt financing agreement for the country’s first onshore LNG development. More than 30m mt/year of LNG production capacity is under development in Mozambique, which would be enough to turn the country into a major LNG exporter. The plans have been thrown offtrack by a radical Islamic insurgency which began in 2017 and which the government has proved unable to control.

The Total project cannot resume without a substantial improvement in the security environment, and this is not likely for at least one or two years, says Nathan Hayes, an analyst at the Economist Intelligence Unit (EIU).  “Operational weaknesses within the Mozambican armed forces and the deep flaws in the government’s counter-insurgency strategy will necessitate more direct external involvement,” in the form of foreign troop deployments, Hayes says.