Total suspends gas project in Mozambique over Palma attack

Total SE of France has declared an indefinite suspension of work on $20 billion natural gas project in Mozambique’s northern Cabo Delgado province due to militant attacks close to its site.

“Considering evolution of security situation in the north of Cabo Delgado province, Total confirms withdrawal of all Mozambique LNG project personnel from Afungi site,” said Total’s Media Relations Department.

The firm on April 26 declared force majeure of building a liquefied natural gas (LNG) processing plant on the Afungi peninsula, citing deterioration of security arising from attacks by an insurgent group in the area.

Force majeure is a legal provision allowing parties to suspend or end contracts due to wars or natural disasters that are beyond their control.

“Petroleum rights holders may lawfully suspend performance of operations on account of a force majeure event,” states in part Article 15(h) of the Mozambique Petroleum Law.

Al Sunnah wa Jama’ah (ASWJ), locally known Al-Shabaab but with no links to the Somali militant group with the same name, started in a low-scale insurgency in Cabo Delgado in 2017 but has now expanded its ferocious attacks closer to the LNG project site. The militant group is linked to the Islamic State of Iraq and Syria (ISIS).

In the crude oil and natural gas (hydrocarbons) sector declaring force majeure is weighty due to the potential of delaying exploration and project building, which could lead to escalation of costs.

Total’s project entails building offshore natural gas production facilities with pipelines linked to onshore liquefaction plant of two trains (processing units) of 13.1 million tonnes per annum (MTPA) able to expand to 43 MTPA.

The plant planned to start LNG production for export in 2024 will use gas from deep sea Golfinho and Atum fields with depth of 1,600 metres in Offshore Area 1 block in Rovuma basin 40 kilometres from the shore.

Total’s force majeure is linked to March attack on the coastal town of Palma, which left scores of people dead, thousands displaced and property destroyed.

Palma is a popular spot for expatriates and local people working on LNG project.