French oil major Total and consortium partners have secured $14.9bn financing from several banks for the $20bn LNG project in northern Mozambique.
The Mozambique LNG project involves the development of Golfinho-Atum gas field located offshore Area 1 Block of the deep-water Rovuma Basin.
It also includes construction of a 12.88 million tonnes per annum (Mtpa) onshore LNG facility on the Cabo Delgado coast.
The Rovuma Offshore Area 1 consortium secured senior debt financing comprising Export Credit Agency (ECA) direct loans, ECA covered facilities, commercial banks loans, and a loan facility from African Development bank.
It raised ECA direct loans from UK Export Finance (UKEF), the Export-Import Bank of the United States (US-Exim), Japan Bank for International Cooperation (JBIC) and Export-Import Bank of Thailand (Exim Thailand).
ECA covered facilities came from UKEF, Atradius Dutch State Business, the Export Credit Insurance Corporation of South Africa Soc (ECIC), SACE and Nippon Export and Investment Insurance (NEXI).
Total E&P Mozambique Area 1 operates Offshore Area 1 Block of Rovuma Basin
Total’s wholly-owned subsidiary Total E&P Mozambique Area 1 operates Offshore Area 1 with a 26.5% stake.
Other partners in the project include ENH Rovuma Area (15%), Mitsui E&P Mozambique Areal (20%), ONGC Videsh Rovuma (10%), Beas Rovuma Energy Mozambique (10%), BPRL Ventures Mozambique (10%), and PTTEP Mozambique Area 1 (8.5%).
JBIC said that the loan would primarily finance the development of the gas field and production of LNG in the project.
It is expected that Japanese utility companies would offtake approximately 30% of the LNG from the Mozambique project, stated JBIC.
This is considered to be the biggest private debt-financing in Africa inspite of the Covid-19 pandemic and volatility in the oil markets.
The project faced several challenges to raise funding due to weakened oil prices as well as growing insurgency in the northern part of the Cabo Delgado province, reported Financial Times.
Earlier this year, Air Products was selected to provide its LNG technology, equipment and related process license and advisory services for the Mozambique LNG project.
