France’s largest financial institution, BNP Paribas, and other institutions have announced that they will stop investing in the Mozambique liquefied natural gas (LNG) development project in Africa because it goes against the decarbonization trend and involves human rights issues.
This move will affect 17 LNG carriers and one floating liquefied natural gas production, storage, and offloading unit (FLNG) involved in the project. In contrast, the Export-Import Bank of Korea has agreed to adjust the project schedule, which is effectively promoting project investment or continuing investment review.
According to recent reports in the South Korean media, BNP Paribas has clearly stated that it will not invest in Mozambique LNG-related projects, saying, “The company will not provide financial support for any LNG export terminals, including Mozambique LNG-related projects. This is consistent with the bank’s position of discouraging exploration and production development, which is reflected in its oil and gas policy.”
As early as 2023, BNP Paribas announced that it would no longer provide financial support for new oil and gas development projects (upstream) and would gradually reduce its financial support for the midstream (transportation and storage) and downstream (distribution and sales) sectors on the grounds of excessive greenhouse gas emissions. As one of France’s six major banks, Credit Mutuel also recently announced that it would no longer participate in the financing of LNG carriers.
Specifically, BNP Paribas will not participate in the financing of the 17 LNG carriers involved in the Mozambique LNG project, nor will it participate in investments related to export terminals, such as FLNG.
According to reports, the Mozambique LNG project is led by French energy giant TotalEnergies. The project began in 2010 following the discovery of significant natural gas reserves off the northern coast of Mozambique, with proven reserves alone totaling 150 trillion cubic feet. The project has a total investment of US$20 billion and received final investment approval in 2019. It is currently progressing from Block 1 to Block 6 and will involve the construction of 40 LNG carriers based on the project. South Korean shipbuilders are primarily involved in the development of Blocks 1 and 4.
In Block 1, Daewoo E&C is responsible for constructing the LNG plant and export terminal, while HD Hyundai Samho and Samsung Heavy Industries are undertaking the LNG carrier construction project. The Export-Import Bank of Korea approved a $500 million loan in December 2020.
In 2020, TotalEnergies signed a Letter of Intent (LOI) with HD Hyundai Samho and Samsung Heavy Industries for the construction of the first batch of 17 LNG carriers. Nine of these vessels will be constructed by HD Hyundai Samho, with Japanese shipowners Mitsui O.S.K. Lines (5 vessels) and Kawasaki Kisen Kaisha (K Line, 4 vessels) as the shipowners placing the orders; the remaining eight vessels will be constructed by Samsung Heavy Industries, with Japanese shipping company Nippon Yusen Kaisha (NYK, 4 vessels) and Greek Maran Gas Maritime (4 vessels) as the shipowners placing the orders.
After signing a letter of intent in 2020, the parties originally planned to sign a formal shipbuilding contract in May 2021 and begin delivery in 2023. However, due to force majeure and other reasons, the contract was repeatedly delayed until the end of April 2025, when the letter of intent expired. HD Hyundai Samho and Samsung Heavy Industries waited five years but were unable to secure the order.
Currently, HD Hyundai Samho and Samsung Heavy Industries have accepted TotalEnergies’ contract extension request, extending the validity period again to after the end of August 2025, and reserving 9 and 8 LNG carrier slots for it respectively.
With two major French banks announcing that they will no longer provide ship financing for LNG carriers, it remains unclear when this large order will be finalized.
Block 4 is an FLNG development project, which is an offshore production facility that integrates mining, liquefaction, storage and loading and unloading functions. The project is planned to produce about 3.4 million tons of natural gas in 20 years starting from 2027. Korea Gas Corporation participates in the project with a 10% stake. At the same time, the Export-Import Bank of Korea and the Korea Trade Insurance Corporation are also reviewing the provision of about US$1.9 billion in financial support for the project.
Not long ago, Samsung Heavy Industries announced that it had signed a preliminary contract worth over US$600 million with African shipowners for offshore production facilities, which is said to be related to the project. The total value of this type of FLNG is approximately US$2.5 billion.