Navigating Decisions: The risks to Mozambique from liquified natural gas export projects
Liquified natural gas (LNG) export projects have been promoted as a way to boost economic development in Mozambique. The European Union has ties to all these projects. This report highlights the negative impacts, economic concerns with project designs, and risks to both future government revenues and sovereignty. Decision-makers should reconsider these LNG projects and investigate more sustainable alternatives for Mozambique.
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The TotalEnergies Mozambique LNG project has received disproportionate public finance support—60 times that of renewable energy in the country. It has also increased national oil company debt and sovereign liability.
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Risks to future financial benefits to Mozambique from LNG projects include delayed government revenues, decreased global LNG demand, volatile gas prices, trade competition, and the security situation near LNG facilities.
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International investment law protects LNG projects at Mozambique's expense, restricting government actions and placing significant liability on the state.
The climate science is clear that there should be no new natural gas project developments, including in Mozambique, if the world is to limit global warming to 1.5°C. Nevertheless, on a purely social and economic basis, there are significant risks that undermine the contribution LNG is expected to make to the Mozambique economy. Most of the proposed financial benefits to Mozambique rely on robust international demand for LNG in the late 2030s and 2040s, which is looking increasingly unlikely. At this juncture, as the global energy transition away from fossil fuels gathers pace, more sustainable projects should be favoured over further investment in LNG.
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