The U.S. Export-Import Bank is considering financing a liquefied natural gas (LNG) project led by Eni SpA off Mozambique’s coast.
This is coming years after backing an onshore LNG facility that has faced delays due to security concerns and opposition from environmental groups, according to Bloomberg.
Eni’s Coral North floating LNG plant is currently listed as a pending project by Ex-Im, the official U.S. export credit agency. The bank stated that the financing details would be revealed following final board approval but did not provide a timeline for the decision.
As the U.S. ramps up engagement in Africa to compete with China for critical minerals needed for the transition to clean energy, Ex-Im has come under scrutiny. A May audit by the inspector general criticized the bank for lacking a clear strategy for growth in the region, a claim the bank has denied.
Ex-Im’s previous investment in Mozambique’s gas sector has faced setbacks. In 2020, the bank provided $4.7 billion in financing for TotalEnergies SE’s Mozambique LNG project along the northern coast.
At the time, Ex-Im said the loan displaced funding efforts from China and Russia. However, its analysis flagged potential security risks, which later materialized as insurgent attacks that halted construction.
Despite the challenges, TotalEnergies’ project is now on track to resume construction by the end of the year, according to CEO Patrick Pouyanne. As of now, Ex-Im has not dispersed any funds for the Mozambique LNG project.
While floating LNG facilities like Coral North are located miles offshore and relatively insulated from security risks, environmental groups are likely to raise concerns.
Activists have campaigned against oil and gas projects across Africa, from Uganda to South Africa, in efforts to curb fossil fuel use. For instance, Friends of the Earth challenged the UK Export Finance’s approval of £1.5 billion ($2 billion) for Mozambique LNG, though the Court of Appeal ruled that the government had not violated climate regulations.
Eni’s $7-billion Coral South LNG project, which began exporting fuel in 2022 from its offshore liquefaction plant, shares its location in the Area 4 concession with partners such as Exxon Mobil, China National Petroleum, Abu Dhabi National Oil Co., Korea Gas, and Mozambique’s state-owned Empresa Nacional de Hidrocarbonetos. The upcoming Coral North project will follow a similar offshore model.
