Oil Minister Visits Mozambique to Expedite $20 Billion LNG Project Restart.

Indian Oil Minister, H S Puri, conducted crucial discussions on Sunday with Mozambique's Minister of Mineral Resources and Energy, Carlos Zacarias, and senior executives from TotalEnergies regarding the expeditious resumption of the $20 billion liquefied natural gas (LNG) project.

This visit follows a meeting held in May 2023 between Oil Secretary, Pankaj Jain, and TotalEnergies CEO, Patrick Pouyanne, to deliberate on the revival of the project located in the southern African nation. The project had been halted in 2021 due to security concerns. These discussions followed a visit to Mozambique by Foreign Minister S Jaishankar in April.

"In a productive meeting with Carlos Zacarias, Minister of Mineral Resources & Energy of Mozambique, we discussed early resumption of operations of the strategically important $20 billion LNG Project in Mozambique in which Indian PSUs hold 30 per cent stake," stated Puri.

The discussions also encompassed the exploration of avenues to further boost bilateral hydrocarbons trade, particularly in LNG, between India and Mozambique. In the last five years, this trade has grown significantly, increasing more than two and a half times from $687.71 million in FY19 to $1,821.39 million in FY23.

During his visit, Puri engaged in deliberations with Maxime Rabilloud, Total's country manager for the gas project in Mozambique, specifically addressing the LNG project. This project stands as the second largest upstream investment destination for India.

Moreover, Puri held a meeting with Mozambique's Minister for Economy and Finance, Max Tonela, during which they discussed issues related to the financing mechanism of the LNG project.

The $20 billion LNG project involves the participation of three Indian Public Sector Undertakings (PSUs) – ONGC Videsh (OVL), Bharat PetroResources (BPRL), and Oil India (OIL) – collectively holding a 30 percent stake in the project. Originally anticipated to commence operations in 2024, the project now faces a delay, pushing the expected start date to 2027. This delay has been attributed to factors such as changes in ownership and security concerns at the project site.

Analysts have suggested that India's involvement in this project will contribute to the diversification of its LNG cargoes. Presently, India imports approximately 20 million metric tons per annum (MTPA) of natural gas from various suppliers. Of this, approximately 8.5 MTPA comes from Qatar through a long-term contract valid until April 2028. State-owned Petronet LNG is in advanced negotiations with Qatar for a long-term contract beyond April 2028, with plans for finalization by December 2023.

HBL