The upcoming restart of the Mozambique liquefied natural gas (LNG) project suspended by France’s TotalEnergies due to the deterioration of the situation on the ground has led to another postponement of the newbuilding project of 17 LNG carriers needed for the project, for which Samsung Heavy Industries and HD Hyundai Miho have reserved slots for several years in a row.
According to Korean media sources, TotalEnergies, together with Samsung Heavy Industries and HD Hyundai Samho, has extended the reservation for 17 LNG carriers needed for the Mozambique LNG project to 2026 again, and shipowners will need to determine whether to place an order with the two shipbuilders by early next year.
Slot reservation refers to locking the shipyard’s new ship construction dock in advance, which is equivalent to the act of order reservation before the official order is placed. Shipbuilders usually reserve slots for shipowners in a cycle of 6 months to 1 year, and it is rare for shipbuilders like Samsung Heavy Industries and HD Hyundai Samho to reserve slots for a project for 5 consecutive years.
In 2020, Samsung Heavy Industries, together with HD Hyundai Heavy Industries, was awarded the Letter of Intent for the construction of the above mentioned 17 LNG carriers; in 2021, due to the deteriorating security situation in Mozambique, TotalEnergies declared the project as force majeure and withdrew from the site, and the project entered into the stage of long term delays, and the newbuilding project related to it was halted. Until now, the two shipbuilders have been waiting for order confirmation for five consecutive years.
Under the agreement at the time, nine of the vessels were to be built by HD Hyundai Samho, with Japanese shipowners Mitsui O.S.K. Lines (5 vessels) and Kawasaki Kisen Kaisha (4 vessels) as owners; Samsung Heavy Industries was to build the remaining eight vessels, with Nippon Yusen Kaisha (4 vessels) and Greek shipbuilder Maran Gas Maritime (4 vessels) as owners. The contract was worth approximately US$3 billion, with the original delivery date set for 2024-2025.
The report states that although project delays may lead to adjustments in delivery dates and specifications, the number of vessels already secured by HD Hyundai Samho and Samsung Heavy Industries remains unchanged. However, due to the withdrawal of shipowner Maran Gas Maritime from the project, the owners of Samsung Heavy Industries’ four-vessel order will change to Japanese shipowners.
The Mozambique LNG project is understood to be aimed at developing the Golfinho and Atum gas fields in Block 1 offshore Mozambique and building and operating two LNG liquefaction plants. The project, which began in 2010 when a large amount of natural gas was discovered off the northern coast of Mozambique, with proven reserves alone amounting to 150 trillion cubic feet, received a final investment decision (FID) in 2019. Total Energy plans to implement two projects with an expanded capacity of up to 43 million tons per annum (MTPA) and a total investment of US$20 billion.