Mozambique's LNG Promise and Its Insurgency Problem: A Status Report
Mozambique sits on one of the largest natural gas discoveries of the last two decades. The Rovuma Basin holds recoverable reserves that, if fully developed, would make the country one of the world's l...
Mozambique sits on one of the largest natural gas discoveries of the last two decades. The Rovuma Basin holds recoverable reserves that, if fully developed, would make the country one of the world's leading LNG exporters and transform the economic prospects of one of Africa's poorest nations. That promise has been deferred, repeatedly, by a security situation in Cabo Delgado province that shows no signs of quick resolution.
TotalEnergies' Area 1 onshore LNG project — the flagship development — remains force majeure since 2021, suspended following an insurgent attack on Palma that killed dozens of workers and contractors. The company has conducted multiple site assessments since, and has not formally abandoned the project, but first LNG from this facility continues to move rightward on every timeline. The most recent indications suggest a return to construction activity requires security conditions that have not yet been achieved at scale.
The offshore picture is more active. ENI's Coral Sul FLNG, a floating LNG vessel moored offshore, has been producing and exporting LNG since 2022 — demonstrating that Mozambican gas can reach global markets. A second FLNG vessel, Coral Norte, is in development and reflects ENI's continued commitment to a model that sidesteps onshore security risk entirely.
Elevated insurgent activity in Cabo Delgado continues to add cost and schedule risk to every project in the region. Rwanda's military presence and Mozambican government operations have reduced the territorial extent of insurgent activity, but the threat has not been eliminated, and developers have become more conservative in their planning assumptions.
For LNG buyers in Europe and Asia seeking supply chain diversification, Mozambique represents enormous potential with a meaningful risk premium attached. The gas is world-class. The path to market is not yet clear.
TotalEnergies' Area 1 onshore LNG project — the flagship development — remains force majeure since 2021, suspended following an insurgent attack on Palma that killed dozens of workers and contractors. The company has conducted multiple site assessments since, and has not formally abandoned the project, but first LNG from this facility continues to move rightward on every timeline. The most recent indications suggest a return to construction activity requires security conditions that have not yet been achieved at scale.
The offshore picture is more active. ENI's Coral Sul FLNG, a floating LNG vessel moored offshore, has been producing and exporting LNG since 2022 — demonstrating that Mozambican gas can reach global markets. A second FLNG vessel, Coral Norte, is in development and reflects ENI's continued commitment to a model that sidesteps onshore security risk entirely.
Elevated insurgent activity in Cabo Delgado continues to add cost and schedule risk to every project in the region. Rwanda's military presence and Mozambican government operations have reduced the territorial extent of insurgent activity, but the threat has not been eliminated, and developers have become more conservative in their planning assumptions.
For LNG buyers in Europe and Asia seeking supply chain diversification, Mozambique represents enormous potential with a meaningful risk premium attached. The gas is world-class. The path to market is not yet clear.