Maputo, 12 Dec (AIM) – The Indonesian state-owned company Pertamina has cancelled its 20-year contract to buy 13.1 million tonnes a year of liquefied natural gas from the Mozambique-LNG project, headed by the French company TotalEnergies.
According to Argus, an English independent media organisation, citing a Pertamina spokesperson, “there is no [penalty] because there is force majeure, so it is an agreement between both parties.”
The planned contract reached financial close in 2019. However, after Islamic terrorists in 2021 attacked Palma district, in the northern province of Cabo Delgado, where the gas projects are taking place, Total Energy was forced to evacuate its staff and halt the work.
“The Mozambique LNG contracts have not been affected”, claimed TotalEnergies chief executive, Patrick Pouyanne, in April.
TotalEnergies offered no comment in response on how Pertamina’s cancellation could affect the project, and whether new capacity would be marketed.
Since the offtake agreements were signed, no other firm has said publicly that it has cancelled.
The LNG project is budgeted at 23 US billion dollars, easily the largest foreign investment in Mozambique to date. TotalEnergies is eyeing a return to the project and is in negotiations with construction firms to restart work, with a view to launching commercial operations in 2028.
The Mozambique LNG project is the first onshore LNG development in the country. The project includes the development of the Dolphin and Tuna gas fields, located in the Rovuma Basin Offshore Area 1, and the construction of a plant with two liquefaction units with a capacity of 13.12 million tons per year (MTPA).
Cabo Delgado has been plagued by islamist terrorism since October 2017 and, according to the United Nations High Commissioner for Refugees (UNHCR), the conflict has left one million people displaced and about 4,000 dead.
However, since July 2021, the Mozambican defence and security forces, with support from Rwanda and the SADC Mission in Mozambique (SAMIM), have been liberating areas near the natural gas projects, which had previously been occupied by the terrorists.