Exxon Wants Government Guarantees For Mozambique LNG Project

Exxon has asked for security guarantees for its Rovuma LNG project from Mozambique’s government, the Financial Times reported, citing unnamed sources, who said the discussions were directly with the president of Mozambique, Daniel Chapo.

Darren Woods, Exxon’s chief executive, reportedly focused on the danger of Islamist activity in the area where Rovuma LNG is to be constructed, after TotalEnergies had to institute a force majeure for its own LNG project in Mozambique due to extremist activity in the area.

The order to suspend construction was issued following a massacre of several hundred people as the islamists tried to take over a local town. The force majeure began four years ago and was only lifted earlier this year.

Rovuma LNG is yet to receive a final investment decision, not least because of the security situation in the Cabo Delgado region where it is planned to be built. Islamist insurgent activity continues there, countered by Rwandan army forces.

Previously, the Rwandan army was working in tandem with forces from the Southern African Development Community, but these withdrew from the security mission in Mozambique after money for payments for the security services provided started running out.

The project, set to be the biggest LNG export facility in Africa, will have an annual capacity of 18 million tons of liquefied gas. Its cost has been estimated at $30 billion. For context, TotalEnergies’ Mozambique LNG project.

The French company said this week it was ready to restart construction work at the facility, indicating the threat of violence in the region may have subsided sufficiently for activities around Mozambique’s nascent LNG industry to restart.

“We strongly believe that the ExxonMobil project, if implemented, will make a huge difference in the economy of Mozambique and, as a consequence, in the life of Mozambicans,” Mozambique’s president said in a statement sent to the Financial Times in response to questions about the security assurances discussion with Exxon’s Woods.

Source: oilprice.com