Oil Minister H S Puri on Sunday held discussions with Mozambique’s Minister of Mineral Resources and Energy Carlos Zacarias and top officials from TotalEnergies on the early resumption of the $20 billion liquefied natural gas (LNG) project.

His visit follows the May 2023 meeting of Oil Secretary Pankaj Jain with TotalEnergies CEO Patrick Pouyanne on resuming operations at the project in the southern African nation, which was halted in 2021 due to security concerns. The meeting was after Foreign Minister S Jaishankar’s visit to the country in April.

“In a productive meeting with Carlos Zacarias, Minister of Mineral Resources & Energy of Mozambique, we discussed early resumption of operations of the strategically important $20 billion LNG Project in Mozambique in which Indian PSUs hold 30 per cent stake,” Puri said on X on Sunday.

Deliberations was also held on exploring avenues to further enhance the bilateral hydrocarbons trade, including LNG, between India and Mozambique, which has already increased more than two and a half times in the last 5 years from $687.71 million in FY19 to $1,821.39 million in FY23, he added.

Puri also held deliberations with Maxime Rabilloud, Total’s country manager for the gas project in Mozambique, on the project, which is the second largest upstream investment destination for India.

Puri also held a meeting with Mozambique’s Minister for Economy and Finance of Max Tonela. They discussed issues pertaining to the financing mechanism of the LNG project.

Three Indian PSUs—ONGC Videsh (OVL), Bharat PetroResources (BPRL), and Oil India (OIL)—hold a total of 30 per cent stake in the project, which was first expected to commence operations in 2024, but has now been delayed to 2027 due to reasons such as change of ownership and security at the project site, sources said.

Analysts said that the move by India will help in further diversifying its LNG cargoes.

India imports around 20 MTPA of natural gas from different suppliers. Of this, around 8.5 MTPA is from Qatar through a long term contract valid till April 2028. State-owned Petronet LNG is in advanced talks with Qatar for a long term contract post April 2028—to be finalised by December 2023.

Project status

Sources said that talks are on with contractors on renegotiating the costs. CCS JV is the onshore engineering, procurement and construction (EPC) contractor for the Anadarko Mozambique’s area 1. It is formed by affiliates of Saipem, in a JV with McDermott and Chiyoda Corporation.

The project is expected to resume by the end of this calendar year, but nothing has been finalised so far, said one of the sources.

Earlier this month, in its July-September 2023 quarter results concall, Total said that it is working on re-starting the project.

Plant visit

Puri reviewed the LNG project along with Oil India CMD R Rath and ONGC Videsh MD and CEO Rajarshi Gupta on Monday.

“Reviewed the 7,500 hectare site of our LNG project in Mozambique’s Cabo Delgado and the 13 MTPA LNG trains with Governor of the Province Dr Valige Tauabo; Heads of Indian PSUs MD & CEO OVL Rajarshi Gupta & CMD OIL Ranjit Rath & representatives of @TotalEnergies,” Puri said in a tweet on X.

He noted that it will contribute to energy security with its large 64 trillion cubic feet (TCF) reserve and will produce 13 MTPA capacity which can also multiply very soon.

When the strategically important project starts, it will dramatically improve India’s energy security and significantly contribute towards India’s journey to achieve energy sufficiency under the visionary leadership of the Prime Minister, he added.

Oil and gas is a strategic sector for India to enhance its energy security, a stated national policy objective. Mozambique has emerged as a preferred destination for global oil majors/ national oil companies (NOCs) in view of large discoveries and potential development of LNG projects in offshore area 1 and area 4, he added.

Growing importance of natural gas in India’s primary energy basket provides it a strategic edge over other sources and Mozambique LNG could be a preferred source for LNG supply at competitive rates, he noted.

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