TotalEnergies' Mozambique LNG Restart: Navigating Geopolitical Risks for Long-Term Energy Resilience

The TotalEnergies-led Mozambique LNG project, a $20 billion venture suspended since 2021 due to security crises in Cabo Delgado, is poised to restart by mid-2025. This milestone comes amid improved military coordination and renewed international financing, but the project's success hinges on mitigating persistent geopolitical risks while aligning with evolving global energy demand. For investors, the Mozambique LNG project represents a high-risk, high-reward opportunity to capitalize on Africa's growing LNG potential—and a test of TotalEnergies' ability to balance strategic ambition with operational resilience.

Geopolitical Risks: Progress Amid Fragility
The project's restart follows years of turmoil in Cabo Delgado, where Islamic State-affiliated insurgents caused widespread displacement and violence. While Mozambican forces, supported by regional allies like Rwanda and South Africa, have stabilized the region, risks linger. France's foreign ministry still warns of travel dangers, and sporadic attacks near the Tanzania border underscore the precarious security balance.

TotalEnergies has leveraged diplomatic and military partnerships to secure the site, but human rights allegations—including reports of military abuses near the facility—threaten to complicate its social license. The company's CEO, Patrick Pouyanné, has pledged cooperation with investigations but faces mounting pressure to address these concerns.

Financing: A Delicate Dance with Export Credit Agencies
The project's financial closure remains incomplete. A critical $4.7 billion loan from the U.S. Export-Import Bank was reapproved in March 2025, but approvals from the U.K. and Dutch export credit agencies—needed to unlock an additional $7 billion—are still pending. These agencies face political and ethical hurdles: the U.K. is wary of funding fossil fuel projects amid its net-zero commitments, while the Netherlands seeks clarity on human rights issues.

Delays in securing these guarantees could push the project's completion to 2029–2030, adding billions in costs. Investors should monitor and the Dutch government's human rights review process.

Energy Demand: LNG's Role in a Transitioning World
Despite the global push toward renewables, LNG remains a bridge fuel for nations seeking to reduce coal dependence. TotalEnergies' project targets Asia and the Middle East, regions where LNG demand is expected to grow by 3% annually through 2030.

However, the market faces headwinds. A projected oversupply by 2026—driven by U.S., Qatari, and Russian projects—could depress prices. TotalEnergies' delayed timeline may prove advantageous, as the project's 13.1 million-tonne/year capacity (expandable to 43 million tonnes) could capitalize on post-2030 demand recovery.

Investment Considerations: Risk, Reward, and Portfolio Strategy
For investors, TotalEnergies' Mozambique project offers a compelling thesis:
1. Upside Potential: Success could boost TotalEnergies' cash flow and Mozambique's GDP by 5.2% annually, while positioning the firm as a leader in African LNG.
2. Downside Risks: Delays, security setbacks, or ESG-driven divestment could erode returns.
3. Strategic Fit: The project aligns with TotalEnergies' hybrid energy strategy, combining fossil fuels with renewables (e.g., solar and green hydrogen in Africa).

Recommendation:
- Buy TotalEnergies (TTE.F) for investors willing to accept geopolitical risk. The stock currently trades at a 15% discount to its 2021 peak, reflecting project uncertainties. A successful financing close and sustained security could drive a rebound.
- Hedge with LNG ETFs: Consider exposure to ETFs like the United States Natural Gas Fund (UNG) to capitalize on price recoveries.
- Avoid: Short-term traders should wait for clearer visibility on financing and security outcomes.

Conclusion
The Mozambique LNG project is a microcosm of the energy sector's dual challenges: navigating geopolitical instability while adapting to a decarbonizing world. For long-term investors, TotalEnergies' commitment to this project—and its broader African energy portfolio—offers a chance to bet on a company well-positioned to profit from LNG's enduring role in global energy markets. However, patience is key: the next 12–18 months will reveal whether TotalEnergies can turn this risky bet into a strategic win.