Exxon Mobil is unable to make a final investment decision on its $30 billion Rovuma LNG project in Mozambique until TotalEnergies resolves ongoing negotiations with the government regarding a related nearby project. The delay affects Exxon because both projects include shared facilities that require coordination.
TotalEnergies confirmed that it had lifted a four-year force majeure on its $20 billion Mozambique LNG project but has requested a 10-year extension of the development and production period, citing a $4.5 billion cost increase. In a letter to the Mozambique Government, the French company outlined the additional expenses, but the government is pushing back, deeming the amount too high.
Work on Mozambique LNG in the Area 1 offshore block has been halted for four years following an Islamist-linked insurgent attack. TotalEnergies CEO told investors that the company will be able to quickly restart the project and that the cost increase is included in its $20.5 billion budget, though he acknowledged the letter to the government had been misinterpreted.
Mozambique’s President Daniel Chapo visited Exxon’s headquarters in Spring, Texas, and announced that the country had signed two memorandums of understanding with Exxon to evaluate domestic gas projects and build a training center to develop the Mozambican workforce. However, a scheduled press conference was cancelled.
Exxon has said it hopes to take a final investment decision on Rovuma LNG in early 2026, with a first cargo expected by 2030. Exxon and Italian energy firm Eni each hold 25% stakes in Mozambique’s Area 4 offshore block, which is estimated to hold more than 85 trillion cubic feet of natural gas. Exxon is leading the construction and operation of the Rovuma LNG onshore liquefaction facilities, while Eni is leading the floating production units in the deepwater block.
Completion of the Eni, Exxon, and TotalEnergies projects could make Mozambique a top 10 global gas producer by 2040, according to consulting company Deloitte. The ongoing delays have highlighted the challenges Mozambique still faces in becoming a major LNG exporter and developing its economy.
Source: bairdmaritime.com