Background
TotalEnergies Extends LNG Project Timeline in Mozambique. TotalEnergies announced on January 22 that its Mozambique LNG project will not be operational by 2029 as previously planned due to security risks, financial constraints, and logistical challenges. The project has been suspended since April 2021 following an Islamist insurgency in Cabo Delgado, with a force majeure still in place. While TotalEnergies initially planned to resume construction by late 2024, ongoing political instability—triggered by disputed general election results in October—has further delayed timelines. APAC Assistance analyzed the key challenges affecting the project and offers risk mitigation strategies for stakeholders in Mozambique’s LNG sector.
Source: Club of Mozambique
RECENT DEVELOPMENTS
TotalEnergies reaffirmed its commitment to resuming Mozambique’s LNG project during a January 27 meeting between CEO Patrick Pouyanné and President Daniel Chapo, who pledged security improvements. However, on January 22, TotalEnergies announced production delays beyond 2029 due to security, financial, and logistical challenges. Upon taking office on January 17, Chapo assured TotalEnergies and ExxonMobil that contract terms would remain unchanged despite delays. In December 2024, a coalition of civil society organizations urged financial institutions to halt funding for the project over security concerns and alleged human rights abuses, but no banks withdrew support. Meanwhile, Mitsui & Co. confirmed plans to resume construction on December 5, citing improved security. Earlier, on September 26, TotalEnergies distanced itself from reports of 2021 human rights violations at the LNG site, stating it had no presence there at the time.
Sources: Cabo Ligado & TotalEnergies
Security Dynamics
The Cabo Delgado insurgency remains a persistent threat despite enhanced security by Mozambican and Rwandan forces. While key areas near the LNG project are more secure, insurgents adapt with ambushes, hit-and-run attacks, and IEDs in peripheral districts. Their resilience is reinforced by regional networks for recruitment, financing, and arms supply. Weak community cooperation and distrust of security forces hinder intelligence-gathering, limiting counterinsurgency efforts. Additionally, financial constraints affect troop morale, logistics, and the long-term sustainability of security operations.
Reputational & Political Stability Risks
TotalEnergies faces reputational risks over alleged 2021 human rights violations by Mozambican security forces, impacting community relations and corporate accountability. Despite denying involvement, activist scrutiny, and ESG concerns could lead to legal or regulatory challenges.
Financial Uncertainty
TotalEnergies’ LNG delay strains financial planning as revenues remain deferred, while Mozambique’s political crisis heightens investment risk. With no near-term cash flow, the company must diversify its financial strategies to sustain project viability.
Geoeconomic Considerations
Mozambique’s LNG market faces uncertainty amid global energy shifts. While Europe seeks alternatives to Russian gas, its renewable push may reduce long-term LNG demand. Meanwhile, Asian LNG demand grows, but buyers favor stable suppliers like Qatar, the US, and Australia. Delays in TotalEnergies’ project risk missing key market opportunities.