TotalEnergies' Mozambique LNG: A Risky Gamble or Strategic Goldmine?

The energy world is abuzz with news that TotalEnergies CEO Patrick Pouyanne has doubled down on his company’s $20 billion Mozambique LNG project, targeting a mid-2025 restart after years of delays. This is no small bet—especially in a sector rattled by geopolitical tensions, shifting energy policies, and volatile commodity prices. Let’s break down what’s at stake here.

The Project’s Make-or-Break Moment

The Mozambique LNG project has been a saga of ambition and adversity. After declaring force majeure in 2021 due to Islamist insurgencies in Cabo Delgado province, TotalEnergies now claims the Afungi industrial site is “completely secure” and ready for construction to resume. The U.S. Export-Import Bank’s March 2025 re-approval of a $4.7 billion loan has been a lifeline, but the project still faces hurdles.

Why It Matters: LNG’s Role in the Energy Transition

LNG remains a critical “bridge fuel” as the world transitions from coal to renewables. With Europe’s reliance on Russian gas waning and Asia’s demand for affordable energy surging, Mozambique’s vast gas reserves—estimated at 40 trillion cubic feet—could position TotalEnergies as a major player in a $500 billion global LNG market. But there’s a catch: competition is fierce. Qatar’s North Field Expansion and U.S. export terminals are already ramping up, threatening oversupply by the late 2020s.

The Risks: Financing, Security, and Timing

• Financing Frustrations: While the U.S. loan is secured, the UK Export Finance’s $1.15 billion withdrawal over fossil fuel concerns looms large. TotalEnergies has warned it will “exercise contractual rights” if lenders back out. Asian banks like Japan’s Mitsui may step in, but delays could push costs higher.
• Security Still a Wildcard: Cabo Delgado’s insurgents remain active, and Mozambique’s government faces economic strain from delayed LNG revenues. A criminal investigation into 2021 human rights allegations adds reputational risk.
• Timing Is Everything: Even if construction restarts on schedule, first production is now 2029–2030, five years behind the original 2024 target. With global LNG oversupply projected by 2030, will prices justify this investment?

The Numbers: TotalEnergies’ Financial Health

- Total’s stock has underperformed peers in 2025, down 12% YTD amid refining margin declines and geopolitical jitters.
- Debt stands at €34 billion, but the company insists it’s “well within targets” and reaffirmed $2 billion in buybacks.

The Bigger Picture: A Bet on Africa’s Energy Future

Pouyanne isn’t just chasing profits—he’s betting on Mozambique’s potential to rival Qatar and Australia as an LNG powerhouse. Success here could unlock ExxonMobil’s adjacent $30 billion Rovuma LNG project, creating a $50 billion African LNG corridor. For investors, this is a high-risk, high-reward play:

• Bull Case: Secured financing, stabilized security, and rising LNG demand post-2027 could deliver a 20%+ return by 2030.
• Bear Case: Delays, oversupply, and geopolitical headwinds could turn this into a stranded asset, dragging Total’s stock lower.

Conclusion: A Call for Caution—But Not Pessimism

TotalEnergies’ Mozambique LNG project is a strategic pivot that could redefine its energy portfolio—or become a costly distraction. The company has made progress on financing and security, but the road ahead is fraught with risks.

Investors should monitor two key metrics:
1. LNG price trends: If global LNG prices stay above $9/MMBtu (as Total projects), the economics improve.
2. Security updates: Any escalation in Cabo Delgado’s conflict could derail everything.

In the end, this isn’t just about Total—it’s about whether Africa can carve out a role in the energy transition. For now, I’d say wait for clarity on UKEF’s stance and the security situation before diving in. But if you’re a long-term energy investor with a stomach for volatility, this project could be a diamond in the rough.

Final Takeaway: TotalEnergies’ Mozambique LNG is a high-stakes gamble. The project’s success hinges on execution, not just ambition. Stay tuned—and keep your eye on those debt levels!