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Business News/ News / India/  Government ramps up efforts to resume Mozambique gas ops

New Delhi: India is ramping up efforts to resume operations at a gas project in a terrorist-affected province of Mozambique where an ONGC Videsh-led Indian consortium has a 30% stake.

An Indian team is expected to visit the African nation soon to take stock of the project. “A team will soon visit the project (in Mozambique). We are looking at having a soft start to the operations," said a person aware of the development.

The $20 billion ‘Offshore Area 1’ project has been under force majeure since April 2021 following attacks by Islamic State terrorists in the coastal town of Palma in Cabo Delgado province. “Considering the evolution of the security situation", the TotalEnergies-operated Mozambique LNG had announced a withdrawal of all project personnel from the site.

Total E&P Mozambique Area 1 Limitada, a subsidiary of TotalEnergies, holds 26.5% in the plant.

Force majeure is a clause that allows removal of liability for natural disasters and catastrophes created by humans.

Three state-run companies hold a total of 30% stake in the project. ONGC Videsh holds 16%, while BPRL Ventures Mozambique BV, a subsidiary of BPCL, and Oil India Ltd hold 10% and 4% respectively.

TotalEnergies also has been making efforts to resume operations at the plant. Last month, the chairman and CEO of TotalEnergies, Patrick Pouyanne, visited Cabo Delgado to review the security and humanitarian situation. A company statement said he met with President Filipe Nyusi. Pouyanne entrusted Jean-Christophe Rufin, an expert in humanitarian action and human rights, with an independent mission to assess the humanitarian situation in Cabo Delgado.

According to another person in the know, efforts have been underway to resume operations for the past few months amid volatility in the global energy market and concerns over low availability of gas due to the Ukraine war. The person said: “It is one of the most prolific gas assets. Its just a three-day journey from there to India. So, once the supplies start, it would significantly and immediately add to the LNG availability in the country."

Queries sent to the union ministry of petroleum and natural gas, ONGC Videsh, BPCL and Oil India remained unanswered till press time.

India has trying to widen its source base for its energy needs. The country currently depends on imports for as much as 85% of its oil needs and 55% of its natural gas demand. So far in FY23 (April-January), India has imported LNG worth $14.88 billion, 36.46% higher than $10.90 billion during the corresponding period of FY22. Qatar has been the largest supplier to India so far, followed by UAE and the US.

Keeping in view the growing demand for gas for in the country the need for energy security, India is also planning a strategic gas reserve, which may come up as a joint venture of public sector companies or as a public-private partnership (PPP).

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Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Updated: 16 Mar 2023, 12:04 AM IST
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