Pertamina cancels Mozambique LNG offtake deal

Indonesian state-owned Pertamina has cancelled its 1mn t/yr 20-year des offtake deal from the planned 13.1mn t/yr Mozambique LNG terminal, a company spokesperson confirmed to Argus today.

"There is no [penalty] because there is force majeure, so it is an agreement between both parties," Pertamina said. It signed the offtake agreement in 2019 (see tables).

The planned terminal reached financial close in 2019, but construction has been halted since April 2021, after conflict near the facility broke out. Operator TotalEnergies is eyeing a return to the project and is in negotiations with construction firms to restart works, with a view to launching commercial operations in 2028.

TotalEnergies offered no comment in response to an Argus queries to how Pertamina's cancellation could affect the project, and whether new capacity would be marketed.

Since the offtake agreements were signed, no other firm has said publicly that it has cancelled. "The Mozambique LNG contracts have not been affected," TotalEnergies chief executive Patrick Pouyanne said on 27 April.

Oil-linked offtake contract prices have risen in recent years, so if offtakers opt out and sign new agreements with other projects, they are likely to pay more. Oil-linked slopes have risen in recent years from about 10 to 13pc, BP vice-president for LNG trading Jonty Shepard said at the World LNG Summit in Athens last week.

Mozambique exports LNG through the 3.4mn t/yr Coral Sul floating liquefaction unit. Other planned projects in the country include ExxonMobil's 18.1mn t/yr Rovuma LNG terminal, and the Coral Norte 3.4mn t/yr floating liquefaction terminal.

Indonesia has considered limiting its own LNG exports to ensure sufficient gas supply for its own needs, as domestic production falls. The country exports LNG, but has no offtake agreements beyond 2027 from its 11.5mn t/yr Bontang terminal.

By Martin Senior