TotalEnergies’ Mozambique LNG Poised for Decision on $4.7 Billion US Loan

(Bloomberg) -- TotalEnergies SE’s $20 billion liquefied natural gas facility in Mozambique is poised for a decision on Thursday over key financing by the US Export-Import Bank. 

Construction of the Mozambique LNG project halted four years ago due to Islamic State-linked militant attacks nearby. US Exim had initially agreed to the $4.7 billion loan in 2019 during the first term of President Donald Trump, and fresh approvals are necessary after such a long delay.

Trump has made multiple appointments to the bank within the last two weeks, pursuing his theme of US energy dominance and supporting jobs in the oil and gas industry. He designated two senior officials to establish a quorum on Exim’s board and named Bryce McFerran, a commodity trader who began his career at Morgan Stanley, as its acting chief banking officer. 

Exim’s approval of an amendment of finance documents for Mozambique LNG is one of two scheduled items on a closed March 13 board meeting agenda. 

“It’s just a matter to amend this contract to put a new completion date in 2030” to reflect the delays to the project, TotalEnergies Chief Executive Officer Patrick Pouyanne said in an interview at CERAWeek in Houston on Tuesday. “Now you have a functional US Exim — President Trump has decided to put in place a new board.”

Unlocking the key funding would be a major step toward restarting the project for TotalEnergies, which has already sunk billions of dollars into the site. It would also renew hopes of economic transformation for the southeast African nation, which has had to wait for the promised windfall. Loan approvals are still pending from export credit agencies in the UK and the Netherlands. 

“The newly reached board quorum allows Exim to remain fully operational, advancing key bank and administration priorities,” an Exim spokesperson said in reply to questions. The bank has been conducting “a fresh review of proposed changes to the terms of financing of its ongoing Mozambique LNG project.” 

Total tried and failed to get renewed approval of the loan at the end of the Biden administration. It hired a Washington lobbyist and Pouyanne wrote letters to cabinet secretaries and a senior White House adviser asking for help. Days after Trump’s inauguration, Exim said it was reviewing proposed changes to the terms of financing for Mozambique LNG to comply with policies of the new administration. 

“Most of the contracts have been awarded to US companies, US contractors,” amounting to more than 40% of the contracts, Pouyanne said, adding that he was “100% confident” the necessary approvals would be granted.  

Assurances that workers can safely return to the site are essential, he said on a Feb. 5 earnings call. While establishing all the security and financing approvals needed to restart the project, the four-year force majeure has taken a toll.  

One supply contract was canceled in late 2023. TotalEnergies and its partners scaled back preparations to return to the site that included building a temporary camp for 9,500 workers and the platforms for the gas-processing facilities, but the work was suspended in February, according to one of the sub-contractors. 

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