The UK government is ending its $1.15 billion support for the Mozambique Liquefied Natural Gas project, led by TotalEnergies. UK Export Finance approved this funding in 2020 to help Mozambique become a major LNG exporter to Europe and Asia.
Years of Islamist insurgency have severely disrupted the $20 billion project, halting work in 2021 and forcing TotalEnergies to withdraw its staff and equipment. In October, the company said project costs had risen by $4.5 billion after the four-year pause.
British business minister Peter Kyle said the decision to end support was due to higher risks and the need to protect UK taxpayers. He noted that UKEF was asked to change its original financing terms but decided it was no longer in the public interest to continue. UKEF will refund all premiums paid.
TotalEnergies lifted force majeure in November but said construction can only resume once Mozambique’s government approves a new budget. The president could still challenge this decision. Renewed jihadist attacks are also adding to the uncertainty.
The project’s shareholders include TotalEnergies (26.5%), Mitsui (20%), ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%), and PTTEP (8.5%). In March, the U.S. Export-Import Bank approved nearly $5 billion for the project, and Dutch company Atradius is still conducting a human rights assessment. Exxon Mobil is developing a separate LNG project nearby.
