Total secures $14.4 billion funding for Mozambique LNG project

Total has secured US$14.4 billion in funding for its liqified natural gas (LNG) project in Mozambique, according to two sources close to the matter.

One of the sources said the French energy giant has reached a financing agreement with a group that includes around 20 lenders for the first phase of senior debt funding of $14.4 billion, but did not specify the banks involved in the agreement.

The sources corroborate an earlier report from Bloomberg which suggested that Total was set to sign the deal – which will be Africa’s biggest private investment yet – in June. The financing is expected to close in the third quarter, the sources added.

Securing funding for the first and most important phase of the $23 billion project is a welcome development for Total and the sector as the COVID-19 pandemic puts pressure on energy prices and the balance sheets of oil and gas companies around the world.

The Area 1 LNG project will generate about $38 billion in revenue for Mozambique’s government over its lifetime, according to a Finance Ministry forecast, and that will be supplemented by sales from the even bigger project led by Exxon and planned in the neighboring Area 4 offshore block.