Government reaffirms sovereign guarantee to Mozambique LNG creditors

The Mozambican government on Tuesday reaffirmed the sovereign guarantee granted to creditors of the Mozambique LNG megaproject, aimed at ensuring the continuity of investments and strengthening financiers’ confidence.

The decision was taken by the Council of Ministers and follows an update to the financial documentation associated with the Area 1 project in the Rovuma Basin, whose activities were fully resumed in January this year by French company TotalEnergies, following the interruption caused by terrorist attacks in Cabo Delgado, northern Mozambique.

Government spokesperson Inocêncio Impissa said this was not a new state guarantee, but confirmation of commitments previously made to the project’s financiers.

“What is being done today is simply to say: what we said in 2019, we reaffirm the same guarantee so that investments can continue to proceed normally,” Impissa said.

The measure, he said, is intended to preserve the confidence of the financial partners involved in the project and ensure the normal implementation of planned investments, and “gives some reassurance to our partners and the investments that are under way”.

Asked about the scope of the decision, Impissa added that the government did not anticipate any changes to the commitments initially made to the financiers, but provided no further details.

“So far, there is nothing to indicate that the initial agreements envisaged with these entities need to be changed,” he said.

Mozambique has three approved megaprojects to exploit the natural gas reserves in the Rovuma Basin, which are classified among the largest in the world, off the coast of Cabo Delgado province in the north of the country.

After four years of suspension due to armed attacks in Cabo Delgado, the Mozambique LNG project (Area 1), valued at around US$20 billion (€17.4 billion), officially resumed in January and is expected to produce up to 13 million tonnes a year from 2029.

Next is the Rovuma LNG project (Area 4), led by ExxonMobil, valued at around US$30 billion (€26.1 billion) and with a planned production capacity of 18 million tonnes of LNG annually.

Mozambique also has the Coral Sul FLNG project, also in Area 4 and operated by Eni, which began producing and exporting liquefied natural gas in 2022.