By Costas Paris, Sarah McFarlane and Benoit Faucon
Fighting between Islamic extremist rebels and Mozambique's army
over a key port is threatening to disrupt the East African nation's
burgeoning natural-gas developments, including a
multibillion-dollar project led by French energy giant Total
SA.
The insurgent group, which is affiliated with Islamic State,
seized control of the Mocimboa da Praia port this month and
government troops have moved into the area on Mozambique's northern
coast on the Indian Ocean to mount an effort to regain control of
the site.
The seizure of the port has interrupted the transit of oil and
gas equipment through the port, a person close to the Mozambican
government said. Much of Mocimboa's infrastructure has been
vandalized, he said.
This person said the rebels had sunk a security forces
reconnaissance vessel and that as of Thursday, the Islamic State
franchise was fighting the Mozambican military from within the
port.
The rebel group, which stepped up attacks in the northern part
of the country last year, infiltrated several neighborhoods in
Mocimboa da Praia, with the help of local accomplices, he said.
The rising threat to Mozambique's gas fields underscores the
expansion of the radical Islamic State in new territories following
the loss of its strongholds in Syria and Iraq two years ago. It
also reflects the inability of the security forces to stop
militants from taking over key infrastructure in regions of Africa
where ISIS is now expanding.
"ISIS was more organized and better equipped than the army,"
said Lorino Machava, who lives in Mocimboa and is a dockworker at
the port. "I could hear officers screaming that they were out of
ammunition and petrol. The soldiers ran away."
The Mocimboa da Praia port is a key logistics link for Total's
$23 billion natural-gas project, located 37 miles north. A month
before the attack Total had secured $14.9 billion in senior debt
financing for the project.
"Two weeks ago it was full steam ahead, but now it's let's wait
and see, " said a Japanese shipping executive involved in talks to
build some 16 new liquefied natural gas carriers worth around $2.9
billion to move the LNG. "We were supposed to arrange the ship
charters this month so we can order the vessels, but after the port
seizure there is numbness. We don't know what's going to
happen."
Aderito Manjate, a truck driver who moves supplies for gas
companies in the region, said the rebels have been "setting up camp
in and around the port. There are no ships coming in and there are
still fire fights. It's very dangerous."
Data from Marine Traffic, a Cyprus-based vessel-tracking
service, show no ships moving in and out of the port since late
July, while other ports in the region including Maputo, Beira and
Nacala to the south, appear to be operating normally.
Total declined to comment on the LNG project and the fighting at
the logistics hub.
The Total facility in Mozambique's northern Cabo Delgado
province involves the development of the Golfinho and Atum offshore
natural-gas fields.
The project is one of three major energy developments planned in
the country that have drawn significant foreign backing in recent
years. Overall foreign investment in Mozambique's gas sector has
soared since a large gas discovery in 2010, and is estimated by
energy executives at around $60 billion, four times the country's
$15 billion economic output last year.
The Total liquefaction project has been in the works for years
under different owners. Total now controls a 26.5% slice and local
energy firm Mitsui E&P Mozambique Area 1 holds 20%, with the
rest split among other investors.
The project is expected to produce around 13 million metric tons
of liquefied natural gas a year after completion in 2023, with
European and Asian buyers already lined up for the output. It is on
the Afungi Peninsula and depends on the Mocimboa da Praia port for
the import of some building supplies and heavy equipment.
Apart from Total, Italy's Eni SpA is leading a consortium
building a separate $8 billion offshore project called Coral
South.
"Eni is carefully monitoring the development of the situation
and it keeps an active dialogue with the government of Mozambique,"
said a company spokesman.
Exxon Mobil Corp. has delayed work on its Rovuma LNG facility in
northern Mozambique.
An Exxon spokesman said the company is working with the
government to protect its workers and facilities but gave no
timeline on when work will resume.
The Total site is being protected by private security
contractors. Armored vehicles patrol a double-fenced perimeter,
with snipers posted on high structures overlooking the facility. A
ship terminal has been built for small vessels to dock.
"The strategy is to create a secure enclave. They have an
airstrip, a port and staff living quarters," said Alexandre
Raymakers, senior Africa analyst at U.K.-based consulting firm
Verisk Maplecroft. "The ultimate concern is ISIS-linked fighters
going on a full frontal land and sea assault on the peninsula and
taking over the site and taking hostages. That is the worst-case
scenario."
It's the third time in the past 12 months that ISIS fighters
have seized Mocimboa da Praia, with the army taking it back after
intense fighting. Some 1,000 civilians in the country have been
killed since 2017 when the ISIS attacks began and more than 200,000
have been displaced, according to the United Nations.
Write to Costas Paris at costas.paris@wsj.com, Sarah McFarlane
at sarah.mcfarlane@wsj.com and Benoit Faucon at
benoit.faucon@wsj.com
(END) Dow Jones Newswires
August 20, 2020 13:47 ET (17:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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