Development of the Cabo Delgado gas project in Mozambique remains stalled, despite assurances from operators that work would resume soon. The $20 billion project, led by French company TotalEnergies and US-based ExxonMobil, aims to convert gas to liquified natural gas (LNG) on the Afungi peninsula. However, construction was halted in 2021 after insurgents captured the nearby town of Palma.
TotalEnergies has announced plans to restart operations, but only after the site is secured and converted into a fortress with restricted access. The company intends to transport all personnel and supplies by air or sea, citing security concerns. ExxonMobil has stated that it will commence operations approximately one year after TotalEnergies resumes work.
The current delay is attributed to ongoing negotiations between TotalEnergies and the Mozambican government, led by the ruling Frelimo party. Prior to the 2021 occupation of Palma, gas contractors and staff were based in the town, which had experienced significant economic growth. TotalEnergies’ decision to relocate staff and contractors to a secure facility within the project site has raised concerns among local businesses and residents, who fear being excluded from the project and losing income and job opportunities.
In response to these concerns, Maxime Rabiloud, TotalEnergies’ Managing Director in Mozambique, met with local business owners from Palma district on September 6. He assured them that the company has no intention of reducing purchases from local businesses, citing existing contracts with agricultural producers and suppliers. Additionally, TotalEnergies has signed an agreement with the Northern Integrated Development Agency (ADIN) to provide $10 million for development initiatives in Palma and Mocimboa da Praia districts.
Local businesses in Palma have announced a strike, starting September 10, to protest the perceived exclusion from the project. Despite the lack of an official restart, approximately 2,000 workers are already on site, preparing the fortress and LNG base. The project’s future remains uncertain, with the Mozambican government and TotalEnergies continuing to negotiate the terms of the project’s restart. The outcome of these negotiations will have significant implications for the local economy and the future of the Cabo Delgado gas project.
