Total Announces the Signing of Mozambique LNG Project Financing

Total has announced the signing of a 14.9 B$ senior debt financing agreement for Mozambique LNG the country’s first onshore LNG development. It includes the development of the Golfinho and Atum natural gas fields located in Offshore Area 1 concession and the construction of a two-train liquefaction plant with a total capacity of 13.1 million tons per annum.

Mozambique LNG represents a total post-FID investment of 20 B$. The project financing amounts to 14.9 B$, the biggest ever in Africa, and includes direct and covered loans from 8 Export Credit Agencies (ECAs), 19 commercial bank facilities, and a loan from the African Development Bank.

“The signing of this large-scale project financing, less than one year after Total assumed the role of operator of Mozambique LNG, represents a significant achievement and a major milestone for the project,” declared Jean-Pierre Sbraire, Chief Financial Officer of Total. “It demonstrates the confidence placed by the financial institutions in the long-term future of LNG in Mozambique. This key milestone has been reached thanks to the dedication of the Mozambique authorities and the financial partners of the project.”

The ECAs participating in the financing include Export Import Bank of the United-States (US-Exim), Japan Bank for International Corporation (JBIC), Nippon Export and Investment Insurance (NEXI), UK Export Finance (UKEF), Servizi Assicurativi del Commercio Estero of Italy (SACE), Export Credit Insurance Corporation of South Africa (ECIC), Atradius Dutch State Business (Atradius), Export-Import Bank of Thailand (EXIM Thailand).

“Signing the Mozambique LNG Area 1 agreement heralds a new age of industrialization for Mozambique,” said Abdu Mukhtar, the Director of the Bank’s Industrial & Trade Development Department. He noted that gas purchasers, such as fertilizer plants, had the potential for improving regional and global competitiveness.

Wale Shonibare, the Bank’s Director for Energy Financial Solutions, Policy and Regulation, said the project would create a new energy model in Mozambique and help to electrify Southern Africa.” Through the availability of domestic gas, the project stands to facilitate the development of gas-fired electricity in Mozambique. This will play a key role in providing reliable and affordable energy for the country and the wider region,” said Shonibare.

The project comprises both onshore and offshore components, which will be funded by a combination of equity, pre-completion cashflows and over $14 billion in senior debt facilities. The senior debt consists of a mix of Export Credit Agency (ECA) direct loans, commercial bank loans and the facility from the Bank, the only multilateral development institution involved in the project’s first phase.

Notably missing is  the FNB Mozambique financing announced by the South African lender to the tune of $15.8B earlier this month.

Total E&P Mozambique Area 1 Limitada, a wholly owned subsidiary of Total SA, operates Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Limited (20%), ONGC Videsh Rovuma Limited (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%)