TotalEnergies’ Mozambique LNG Project Awaits Critical U.S. Loan Decision
TotalEnergies SE is on the verge of a key decision regarding a $4.7 billion loan from the U.S. Export-Import Bank for its $20 billion LNG facility in Mozambique. This comes after a four-year hiatus due to regional instability, and the company is optimistic about obtaining the necessary financing to restart construction and stimulate Mozambique’s economy.
TotalEnergies SE is preparing for a crucial decision regarding financing for its $20 billion liquefied natural gas (LNG) facility in Mozambique, specifically a $4.7 billion loan from the U.S. Export-Import Bank. This decision is set to occur on Thursday amidst ongoing delays and challenges due to militant activities in the region, which halted construction four years ago.
The U.S. Exim Bank originally approved the $4.7 billion loan in 2019 during President Donald Trump’s administration. However, fresh approvals are now required due to significant delays in the project. Recently, Trump made new appointments to the Exim board, aiming to enhance U.S. energy dominance and support job creation within the oil and gas sector.
In a recent interview, TotalEnergies CEO Patrick Pouyanne indicated that the amendment to the financing documents would simply adjust the project’s completion date to 2030, reflecting the extended timeline. He emphasized that with the reestablished board at the U.S. Exim, the project is closer to securing the essential funding for its continuation.
Unlocking this funding is vital not only for TotalEnergies, which has already invested heavily in the project but also for Mozambique’s economic future. Meanwhile, loan approvals are still awaited from the UK and Netherlands export credit agencies.
An Exim spokesperson noted that the reestablished board quorum would enhance the bank’s operational capabilities and priorities, just as the bank reassesses the financing’s terms for Mozambique LNG. Previously, TotalEnergies had sought assistance during the Biden administration but faced setbacks despite hiring lobbyists and engaging with government officials.
Pouyanne expressed confidence in the likelihood of receiving the necessary approvals, citing that over 40% of contracts awarded so far have gone to U.S. companies. He highlighted the significance of ensuring safe conditions for workers to return to the project site following a four-year pause due to security concerns and project suspension.
In conclusion, TotalEnergies is poised for a significant decision regarding $4.7 billion in financing from the U.S. Export-Import Bank for its Mozambique LNG project. This financing is crucial for restarting construction which has been stalled since militant attacks four years ago. With confidence in obtaining approvals and a focus on securing worker safety, TotalEnergies aims to contribute to Mozambique’s economic revitalization.
Original Source: financialpost.com
