Page 7 - DMEA Week 33

DMEA COMMENTARY DMEA

Plan for the
Mozambique LNG plant

supplies needed to respond effectively. (They by incidents such as the coronavirus (COVID-
have also reported that the rebels are using resi- 19) outbreak that hit Total’s work camp earlier
dents of the region as human shields.) this year.
On August 12, FDS suffered a major setback. Additionally, the investors may have to
ASWJ forces succeeded in gaining control of review security arrangements in order to protect
Mocimboa da Praia, a port that has been serving the employees and prevent disruption to the pro-
as the main entry point for shipments of equip- ject. They have already established robust secu-
ment and goods for Mozambique LNG. The rity protocols for the plant, but they may want to
port is about 75 km from the site on the Afungi start providing more protection for employees
peninsula where the consortium is building the and contractors who are away from the work
onshore plant that will process gas from Area 1. site. The rebels have already staged attacks on
As of press time, neither Total nor the other Mozambique LNG’s contractors.
IOCs involved in Mozambican gas projects had In the most recent incident, eight employees
commented publicly on the takeover of Mocim- of Fenix Construction Services, a local com-
boa da Praia. pany that has contributed to the project, died
As such, it was not clear whether recent after gunmen ambushed one of its vehicles near
events had affected the pace of work on Mozam- Mocimboa da Praia.
bique LNG’s liquefaction plant.
Risk and reward
Challenges ahead These considerations are not likely to derail
Nevertheless, there is likely to be more trouble the project – or discourage investors in other
ahead. ASWJ, which attacked and occupied ongoing Mozambican LNG schemes. As Ed
Mocimboa da Praia briefly earlier this year, is Hobey-Hamsher, Verisk Maplecroft’s senior
not likely to retreat any time soon. Nor is FDS Africa analyst, told Africa Oil Week in late July,
likely to give up, even if it struggles to re-establish the security risks are not high enough to out-
government control in northern Mozambique. weigh the potential for profit.
In the meantime, as long as the fighting Nevertheless, they could force Total and
continues, Total and its partners will have diffi- other IOCs to postpone work on their projects.
culty accessing the port they have been using to Moreover, the delays might turn out to be longer
import the supplies they need to build its LNG than expected if conflict between ASWJ and FDS
plant. They may have to make new arrangements grinds on – or if it escalates.
for supply shipments if the militants retain con- And it may indeed escalate. “The complicity
trol of Mocimboa da Praia – or if port facilities of state officials in criminal activities in Mozam-
are damaged in fighting between the militants bique increases the likelihood that the ASWJ
and FDS. will eventually secure the weapons necessary for
In either case, they might have to revise their attacks on onshore LNG sites,” Hobey-Hamsher
work schedule, which has already been affected said.™

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