The unstoppable tragedy of Mozambique LNG
DEEP DIVE: Neither Trump nor Mozambique can afford *not* to build this $20 billion megaproject — human rights abuses be damned
Amid rapidly deteriorating US-China trade relations, the Trump administration’s renewed support for the Mozambique LNG project is taking on new significance.
The Export-Import Bank of the United States (EXIM) recently reapproved a $4.7 billion loan to bankroll the sprawling onshore development on the east coast of sub-Saharan Africa.
Led by French oil major TotalEnergies, Mozambique LNG is a $20-30 billion megaproject with a nameplate capacity of 12.9 million tonnes per annum (mtpa).
The loan was first issued in 2019 but required fresh approval from EXIM — which answers to the White House — following years of delays.
TotalEnergies declared force majeure in 2021 amid a worsening security situation in the northern Cabo Delgado province that hosts the development.
The decision to rubber stamp the loan was seen as incongruous: why use American taxpayer dollars to de-risk a contentious project that’s targeting the same Asian markets as the next wave of American LNG export plants planned along the US Gulf Coast?
Reputational hazard
Mozambique LNG has become synonymous with a brutal counterinsurgency against Islamist militias in the isolated war-torn northern territories of Mozambique near the border with Tanzania.
An investigation published by Politico late last year detailed horrific human rights abuses perpetrated by Mozambican soldiers on the Mozambique LNG payroll operating out of the plant’s Afungi construction site. TotalEnergies denies it was aware of these incidents and welcomed an official criminal investigation.
Last month, French authorities launched a manslaughter probe against the French oil and gas major for allegedly failing to protect its subcontractors killed in a ruthless siege of a hotel in Palma in 2021. The company is cooperating with the investigation, the second manslaughter complaint arising from this incident.
Why, then, is EXIM so keen to bankroll a high-stakes African LNG gamble with extreme reputational risks?
More than just jobs
The commonly cited justification is that the project will procure more than 40% of its goods and services from US contractors. EXIM says Mozambique LNG will support nearly 17,000 American jobs in the five-year construction phase.
The largest beneficiary is Houston-based McDermott, which signed a $2 billion contract in 2019 to help build the facility.
But the reality is more complex. By its own admission, the EXIM deal is the US government’s largest investment on the African continent.
This is not a simple state loan to fund American economic exports. Mozambique LNG is of existential significance for the host country’s ruling elite, and a geopolitical priority for the Trump administration as it launches a bruising trade war against China.
I reported on the travails of Mozambique LNG in a previous life as a daily gas/LNG news editor, documenting the twists and turns as financiers steered what would be Africa’s largest capital project through to a final investment decision (FID).
This Deep Dive reveals little-known details surrounding the financing commitments between Western sponsors and the government of Mozambique — and the geopolitical tailwinds propelling this high-stakes megaproject through a quagmire of insecurity.
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