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Financing Secured for Mozambique LNG Project

Total secured up to $16 billion for its Mozambique LNG project, according to global law firms White & Case and Latham & Watkins, advisors involved in the financing of the $20-billion project.

Total did not comment on the financing, but both law firms said the project will be funded by a combination of equity, precompletion cash flows, and up to $16 billion of senior debt facilities. The senior debt comprises a mix of export credit agency facilities, commercial bank facilities, and a loan with the African Development Bank. The project expects to achieve financial close in Q3.

The sponsors include operator Total and co-venturers from Mozambique, Japan, Thailand, and India, including Empresa Nacional de Hidrocarbonetos, Mitsui, Japan Oil Gas and Metals National Corp., PTT Exploration and Production, Oil and Natural Gas Corp. Ltd., Bharat Petroleum Corp. Ltd., and Oil India Ltd.

In May, South Africa’s Rand Merchant Bank (RMB) confirmed that the Mozambique LNG project would receive $15 billion of financing commitments and in July said the contracts were signed. Bloomberg said the financing deal also involved 20 banks including Standard Bank Group and Société Générale S.A.

The project reached final investment decision in June 2019 and comprises approximately 75 Tcf of recoverable natural gas in Offshore Area 1. Initial plans are for two trains with scope to expand up to 43 mtpa. First production is expected to be delivered in 2024. 

Mozambique LNG will generate about $50 billion in revenue for Mozambique’s government over 25 years, according to Total.

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