TotalEnergies LNG Project: Over 100 environmental groups, including Action Aid International and Greenpeace France, wrote to more than two dozen project backers to highlight TotalEnergies’ $20 billion liquefied natural gas (LNG) terminal in Mozambique’s environmental and human rights risks. The communication, seen by Reuters, strongly urges financial organizations to reconsider supporting the project because to concerns about climate change and human rights issues in the impoverished southern African nation.
This push comes at a pivotal moment for TotalEnergies as the French energy titan gears up for the revival of what’s being billed as Africa’s largest foreign direct investment venture. The project, marred by delays and safety concerns, has become a focal point for activists striving to bring attention to the potential downsides of mammoth energy initiatives in developing nations.
The Netherlands recently threw a curveball into the mix by declaring its intent to demand consultations on safety and human rights issues before greenlighting a hefty 1 billion euro loan guarantee for the project. This move has been hailed as a substantial step toward addressing environmental and social considerations in major infrastructure undertakings. Activists, riding high on this development, now hold hope that other financial backers will take a cue and conduct thorough assessments before continuing their support for what they perceive as a potentially troublesome venture.
In response to the activist salvo, TotalEnergies has held its ground, asserting that project finance arrangements remain intact despite a force majeure-induced pause in 2021 due to security threats from Islamist militants. The initial financing agreements, inked in 2020, entailed a complex web of direct and covered loans from eight export credit agencies, 19 commercial banks, and the African Development Bank (AfDB).
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Societe Generale, a major player in the project’s financial lineup, opted to stay mum on the matter, and the AfDB followed suit by maintaining a stoic silence. Presently, approximately $15 billion in financing hangs in the balance as part of the grand effort to jump-start the project.
The project’s protracted delay has prompted some investors to reevaluate their financial calculus, factoring in variables like inflation and the ever-fluctuating global gas market. The U.S. Export-Import Bank, holding the purse strings to the tune of $5 billion for the project, has signaled its intent to conduct due diligence on plans to resurrect construction. Reta Jo Lewis, the bank’s president, made it clear earlier this month that any proposed changes to the terms of its approved financing for the Mozambique LNG project would undergo rigorous review and evaluation.
As environmental and human rights concerns increasingly take center stage in discussions around major energy endeavors, the missive from environmental groups serves as a stark reminder that financial behemoths wield considerable influence in shaping the trajectory of such ventures. The evolving landscape underscores the delicate dance between economic development aspirations and the imperative of factoring in environmental and social considerations, especially in regions where the impact of colossal projects can be far-reaching.
Our Reader’s Queries
What is the largest LNG project in the world?
Qatargas, the world’s largest LNG producer, was founded in 1984 as a joint venture between Qatar Petroleum, ExxonMobil, and other partners. With 208 wells in operation, the company supplies an impressive 18.5 billion standard cubic feet of gas.
Who is the largest producer of LNG in the world?
For years, Qatar held the title of the world’s top LNG exporter until Australia took over in 2021. Despite this, both countries have maintained similar levels of LNG exports. However, the U.S. has experienced a significant surge in exports, which is impressive considering that just seven years ago, the country barely produced or exported any LNG.
What are the new LNG projects in 2024?
Several projects are set to begin commissioning work in the US by 2024. These include Venture Global’s Plaquemines LNG terminal in Louisiana, Cheniere’s expansion of its Corpus Christi LNG plant in Texas, and the Golden Pass LNG export facility in Texas, which is sponsored by QatarEnergies and ExxonMobil.
Who is the US largest exporter of LNG?
The U.S. has taken the lead as the world’s largest exporter of liquefied natural gas (LNG) after the restart of Texas’ Freeport LNG facility. In 2023, the U.S. surpassed Australia and Qatar as the top supplier of LNG. This marks the first time the U.S. has held this position, solidifying its position as a major player in the global energy market.