French oil major TotalEnergies and its fellow partners on the $20 billion Mozambique LNG project have agreed to provide additional equity to replace the previous contributions of British and Dutch export credit agencies, it said on Tuesday. The UK and Dutch agencies represented about 10% of the $15.4 billion in external financing initially obtained for the project, Total said. The Total-led 13 million metric-tons-per-year liquefied natural gas project in Mozambique will transform the country into a major gas exporter when it begins producing in 2029 — but it has been mired in security, finance and human rights issues.
Jihadist attacks in the region forced a four-year construction freeze from 2021 while government soldiers sought to quell the insurgency, with methods often criticized by nonprofit observers. On Monday Britain’s government said it would rescind $1.15 billion in loans and export insurance to the project, saying the project was too risky. The Dutch government announced Total had opted to cancel an insurance request with Atradius, its export credit arm, just as the Netherlands was finalizing a decision on whether to withdraw based on an independent human rights review.
Total said that following the lifting of force majeure on the project last month, the partners opted to move ahead without the support of Atradius and UK Export Finance (UKEF), the only agencies that had yet to reconfirm financing. “The Mozambique LNG partners have unanimously agreed to provide additional equity to replace the UKEF and Atradius contributions,” Total said ina statement. Financing agreements with remaining lenders have been amended to reflect the four-year freeze and new project schedule.
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Regarding the human rights review commissioned by the Netherlands — which found that allegations of civilian torture by government soldiers near the project site were “credible” — TotalEnergies said it was produced using information gathered by third parties rather than on-the-ground investigation. Mozambique LNG partners are TotalEnergies (26.5%), Japan’s Mitsui (20%), Mozambique’s state-owned ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%) and Thailand’s PTTEP (8.5%).
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