The US Export-Import Bank (Exim) has approved support for a gas project in Mozambique, even as watchdogs posed questions on associated human rights violations.

The nod by US export credit agency now gives a lifeline to the long-delayed Mozambique liquefied natural gas (LNG) project, owned and operated by the French multinational oil company, TotalEnergies.

The $20-billion initiative had been frozen in 2021 due to violent unrest in the northern Cabo Delgado region where it is located.

TotalEnergies holds a 26.5 percent operating stake. The $5 billion from the Export-Import Bank had been under discussion for some time but faced hiccups including political transition in the US.

Before the funding had been approved, TotalEnergies had lobbied the US Export-Import Bank to approve the financing, fearing “additional and lengthy delays” from a US transition.

Regulatory filings to the US Department of Justice reveal that TotalEnergies had retained Primus Responsum LLC, which advises companies and governments on controversies, legislative and regulatory matters, international transactions and foreign trade barriers, to help them unlock financing from Exim Bank, at a fee of $250,000, if the approval was made before January 20 when US President Donald Trump took over from Joe Biden.

TotalEnergies’ CEO Patrick Pouyanne pitched the Mozambique LNG—whose other shareholders include Mitsui, ENH, ONGC, Bharat Petroleum, PTTEP, and Oil India—as a possible alternative to the Russian gas for the European market, in the aftermath of the Russian invasion of Ukraine.

It estimates to add 16,000 jobs to the American economy.

However, the project had been dogged by claims of human rights violations. Last week, French State prosecutor opened investigations into TotalEnergies for involuntary manslaughter and failing to assist people in danger. It followed complaints from subcontractors who narrowly escaped death or families of victims of the 2021 Palma massacre in Mozambique.

In the massacre, which started on March 24, 2021, Islamic State-affiliated insurgents, known as al-Shabaab (with no ties to the Somali militant group by the same name), launched a coordinated assault on Cabo Delgado province, resulting in killings, beheadings, and the displacement of tens of thousands of people in the town.“TotalEnergies will cooperate fully with this investigation,” the company said on Saturday in a statement.

In a statement released at the time the complaint was filed in 2023, the company had “strongly rejected these accusations.”Seb Kennedy, founder of Energy Flux, which analyses global natural gas markets, noted that the Mozambique LNG has faced repeated suspensions since 2021 due to insurgent violence, something wasn’t Total’s fault per se.

The ongoing extremist attacks across the northern Mozambique continue to pose a threat to the development of the project, however.“While the project was not directly responsible for violence associated with counterinsurgency, it was a catalyst. The sliding financial investment decision (FID) timeline underscores how quickly optimism about LNG megaprojects can collide with the messy realities of operating in a conflict-prone region,” added Kennedy.

However, ongoing extremist attacks in northern Mozambique continue to threaten the development of the project.

According to a report in the Financial Times, the British government is seeking legal advice on whether to withdraw its support because of the ‘volatile situation’, while the Dutch government announced in a letter on March 4 that it was launching an independent investigation into human rights abuses by Mozambican security forces.

But Pouyanne is confident.

He believes that although these financiers have changed their stance on financing oil and gas projects, they will honour their commitments. The development of LNG projects in Mozambique’s Cabo Delgado, where the TotalEnergies project is based, has been plagued by poorly managed community resettlement, escalating social tensions and inadequate human rights due diligence.

TotalEnergies closed the Afungi site in 2021 and has previously delayed restarting operations, citing force majeure.

Total’s goal of exporting gas to the EU as planned may not be achieved, as the US is now exporting more of its own gas to the EU from its own projects. TotalEnergies has admitted that the project itself won’t even come online this decade, with Pouyanne saying in an interview at CERAWeek in Houston on Tuesday that “it’s just a matter of amending this contract to set a new completion date of 2030”.

By then, the project will be competing with other new LNG export projects expected from Qatar and the US.

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