France's Total has taken over operatorship of the Mozambique Liquefied Natural Gas project after closing the $3.9 billion acquisition of Anadarko Petroleum’s 26.5% stake.

The completion came just days after the project received a $5 billion direct loan from the Export-Import Bank (Exim) of the US, with the bank saying that the US content requirement of the project would continue to apply under Total's operatorship.

“Mozambique LNG is a one-of-a-kind asset that perfectly fits with our strategy and expands our position in liquefied natural gas”, said Total chief executive Patrick Pouyanne.

“As the new operator, we are fully committed to the project and we will bring the best of our human, technical, marketing and financial capacities to further strengthen its execution."

Speaking in the central Mozambican city of Chomoio alongside President Filipe Nyusi, Pouyanne said Total will implement the project "in the best interest of all those involved, including the government and the people of Mozambique”. Partners in the liquefaction scheme are state-owned ENH on 15%, Japan's Mitsui on 20% with three Indian players — ONGC Videsh, Beas Rovuma and BPRL — each holding 10% stakes while PTTEP of Thailand has an 8.5% interest.

The project involves feeding gas from the deep-water Golfinho and Atum fields in Area 1 to an initial two-train liquefaction plant with a total capacity of 12.9 million tonnes per annum.

Area 1, said Total, contains more than 60 trillion cubic feet of gas resource of which 18 Tcf will be developed with the first two trains.

Total said the Mozambique LNG project is "largely de-risked" because almost 90% of the production has been sold through long-term contracts with buyers in Asia and Europe.

In addition, the project is expected to have a domestic gas component for in-country consumption to help fuel future economic development.

A final investment decision on the LNG scheme was announced this June with the project expected to come into production by 2024.

Total's upstream president Arnaud Breuillac told investors last week that “studies for Trains 3 and 4 have already started”, with the two-train second phase set to exploit about the same amount of resource as phase one.

Both Area 1's resources and the liquefaction site at Afungi in Cabo Delgado province — to be shared with the ExxonMobil-led Rovuma LNG project — allow Mozambique LNG to support another pair of LNG trains beyond phase two.

A recent presentation from Thai partner PTTEP said that Area 1 hosts 75 Tcf of recoverable resources which can support some 50 million tpa of liquefaction capacity.

Closing of Total's Mozambique acquisition came after the company reached an agreement with Occidental in May this year to buy Anadarko’s African assets for $8.8 billion.

Occidental chief executive Vicki Hollub was also at Chimoio last week and said the Total transaction will result in a payment to the Mozambican government of around $880 million in capital gains tax.

Nyusi — on the campaign trail ahead of this month's presidential election — said almost a third of these funds will be used to plug the hole in the government's budget caused by cyclones Idai and Kenneth.

Meanwhile, Exim’s board voted unanimously late last week to authorise a $5 billion loan to support American jobs and also head off proposals by China and Russian to help fund the Mozambique LNG scheme.

Exim said the loan will support US exports of goods and services for the engineering, procurement, and construction of the liquefaction plant and related facilities.

A consortium of Chiyoda, McDermott and Saipem have been contracted to build the initial two trains.

Exim estimated the loan would help support about 16,400 US jobs — over a five-year construction period — at suppliers in Texas, New York, Pennsylvania, Georgia, Tennessee, Florida, and the District of Columbia.

The transaction is also anticipated to generate more than $600 million in revenue for US taxpayers through fees and interest earned.

Exim’s president Kimberly Reed said: “Private financing was not available for this project given its size, complexity, and risk (so) necessitating support from Exim.

“We have been told that China and Russia were slated to finance this deal before our Exim board quorum was restored by the US Senate. The project now will be completed without their involvement.”

According to Reed, the project will benefit Mozambique to the tune of more than $60 billion over the project’s lifetime, more than four times the country’s current gross domestic product.

Exim board member Spencer Bachus claimed that without US involvement in the project, it would have become “a debt trap for Mozambique” with environmental, labour and work conditions given little regard and negative social impacts on local communities.

Exim is also considering making a loan to Rovuma LNG.

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