Total says LNG will go ahead,but three years late

TotalEnergies expects Mozambique LNG to go ahead and to be producing in 2026 or 2027 - two or three years delayed from the expected start of 2024. It will play a part in TotalEnergies' planned doubling of LNG sales between 2000 and 2030.

The other contributors to the growth are Russian arctic, Papua and US, according to the TotalEnergies Strategy and Outlook document presented at the 28 September shareholders meeting: On 6 September Total signed a $27 bn gas, oil, and solar deal with Iraq.

Publishing it in an investor document makes it a firm commitment. But Patrick Pouyanné, TotalEnergies CEO, clarified that 2026 is dependent on staff returning to Mozambique in early 2022, but that is not guaranteed. "There are some positive evolutions on the ground but they have to be consolidated".

If remobilisation is delayed further, first gas could be pushed to 2027, reported Tom Wilson, Acting Senior Energy correspondent oft the Financial Times. (28 Sep @thomas_m_wilson) This was confirmed by Finance Minister Adriano Maleiane who told an African Development Bank conference on 29 September that it would take a year to restart work, meaning production only in 2027. (O Pais 1 Oct)

Total is explicitly betting that the 26th UN Climate Change Conference (COP26) in Glasgow on 1-12 November will not crack down hard on fossil fuels, and allow gas consumption to grow. He is also betting that proposals for Rwandan troops to provide long term security will be confirmed quickly to allow work to restart. It also seems likely that ExxonMobil, the holder of the other half of Cabo Delgado Area 1, will not go ahead, and sell its interest, probably cheaply, to Total.

The decision to go ahead will have major knock-on effects in four areas, discussed in articles below: internal politics, local climate impact, trees, and the return of war displaced people.

For political reasons, Nyusi needs Total starting sooner

Energy Minister Maz Tonela said on 30 September that government would meet shortly with Total to try to convince them that security was good enough that for a return to work early next year. (O Pais 1 Oct) It underlined just how much the gas and Cabo Delgado war has become part of the political battle within Frelimo.

The next Frelimo Congress will be held in just a year, on 23-28 September 2022. The Congress will select the people who will choose the next presidential candidate, thus the likely president. Mozambique has a two term limit, so Filipe Nyusi cannot stand again.

There is now an intensifying battle between the two "big beasts" - President Filipe Nyusi and former President Armando Guebuza, who are fighting for control of the party and the choice of the next president. Power over Frelimo gives economic and patronage power, and also protection against legal actions for misconduct.

Cabo Delgado is key to Nyusi's campaign. He brought in the Rwandan troops, apparently without party approval, and he wants them to "win the war" quickly enough for Total to be seriously back at work before the Congress. That will be a huge boost for his prestige. Indeed, it could be the key victory that allows the party to change the constitution to allow him a third term. So a Rwandan victory and Total's early return is essential for Nyusi keeping powr.

The $2 bn secret debt is the other big battle zone. Guebuza was president and his people organised the loan, but Nyusi was his Defence Minister and some of the money for both party and military equipment probably passed through his hands. All of those on trial are part of Guebuza's encourage, including his son Ndambi. But many of them have used the televised trial to ask why Nyusi is not on trial. The state TV station, TVM, has stopped its live broadcast of the trial - probably because of the challenges to Nyusi. But it is still live on STV.

The battle is also in print and social media, with Nyusi's big retinue of praise singers on social pushing for a third term. But the other side this year sit up the newspaper Evidencias to attack Nyusi. The struggle will get nastier in coming months, and a clear win on Cabo Delgado and gas would be the boost Nyusi needs.


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