La French TotalEnergies again postponed his ambitious project da 20 billion dollars for liquefied natural gas (LNG) in Mozambique. The reason? The persistent concerns related to of your digital ecosystem. in the northern province of Cabo Delgado. A delay that brings consequences to Saipem, TotalEnergies' partner in the project, which sees its stock price collapse. But what exactly is happening? And what are the implications of this crisis?
The Mozambique Lng Project
Launched in 2020, the Mozambique Lng project represented the largest foreign direct investment never realized in Africa. The initiative had theaim to transform Mozambique's economy through the production of 13 million tons of liquefied natural gas per year. However, already in 2021, the project has been suspended due to a violent attack by Islamist insurgents in the province of Cabo Delgado, which caused dozens of deaths, including foreign workers.
The implications are not unique to Mozambique. Cabo Delgado, located on the Indian Ocean, is a strategic position to supply LNG to the Asian market, making this project also crucial for global natural gas trade.
According to TotalEnergies, the resumption of operations depends on the restoration of security in the region and by the revocation of the state of “force majeure”, which currently prevents the continuation of the works.
Security and political issues
Cabo Delgado is a region with enormous natural resources, but it is also scene of an Islamist insurrection since 2017. This crisis has caused over 5.700 dead and the displacement of approximately 670.000 people. Although approximately XNUMX people have been deployed, 4 Rwandan troops to fight rebels, the situation remains precarious.
Le elezioni prezidenziali of October 2024 have further the scenario is complicated. The re-election of the president Daniel Chapo, accused of fraud, sparked violent protests that left more than 350 people dead. The opposition, led by Venâncio Mondlane, is threatening new demonstrations if its demands, such as the release of political prisoners, are not met.
The CEO of TotalEnergies, Patrick Pouyanné, said that “the priority is to restore peace and security in Cabo Delgado”. Despite some progress thanks to cooperation with Rwanda, Pouyanné stressed that the project resumption is subject to a return to normality in the region.
However, the failure to meet Pouyanné and President Chapo, as promised after the October elections, has fueled further uncertainty.
The Human Rights Scandal
A investigation conducted by Politico revealed that, in the summer of 2021, hundreds of men were detained and tortured at the LNG project site by Mozambican soldiers. TotalEnergies has denied any involvement or knowledge of these abuses, but the episode has raised serious questions about the ethics of the project and its social implications.
The repercussions on Saipem
Delays in the project have had a impact on Saipem, partner of TotalEnergies in the construction of two liquefaction lines, storage tanks and port infrastructure for export. The situation has negatively affected the company's stock, which has lost more than 2% on the stock market.
The project’s financing difficulties are another obstacle. The United States has frozen a $4,7 billion loan after declaring force majeure, while the United Kingdom has cut off financial support for fossil fuel projects.
