Mozambique's €17.5B Gas Project Resumes: What It Means for Portugal's Energy Future

The Portugal Energy Security Angle: Mozambique Gas Megaproject Advances as Security Questions Loom

The TotalEnergies-led liquefied natural gas (LNG) megaproject in northern Mozambique is moving forward with construction after a nearly five-year suspension, a development with direct implications for Portugal's energy diversification strategy and European supply chains. The €17.5 billion ($20 billion) Mozambique LNG venture in the Rovuma Basin is set to produce 13 million tonnes per year starting in 2029, positioning the former Portuguese colony as a critical alternative gas supplier to Europe amid ongoing geopolitical volatility.

TotalEnergies CEO Patrick Pouyanné confirmed in Brussels this week that "security is good today" at the Afungi peninsula site in Cabo Delgado province, declaring the project "will never stop again." Speaking after meetings with Mozambican President Daniel Chapo, Pouyanné emphasized the strategic importance of maintaining momentum on what represents TotalEnergies' largest African investment. Over 4,000 workers—more than 3,000 of them Mozambican nationals—are now on-site as construction resumes in earnest.

Yet the assurances come against a backdrop of mounting uncertainty. The Rwanda Defence Forces (RDF), whose 2,000+ troops have been instrumental in stabilizing Cabo Delgado since 2021, may withdraw as early as May when European Union financial support expires. The EU has provided €40 M over 36 months for logistical and equipment support to the Rwandan mission, and Brussels has made clear there are no ongoing negotiations to extend that funding.

Why This Matters

• Energy Diversification: Portugal and the EU have prioritized reducing dependence on Russian gas; Mozambique LNG offers a potential Atlantic alternative with strong Lusophone ties.

• Security Vacuum Risk: Rwanda's potential exit in May creates uncertainty around insurgent resurgence in the gas-rich region, threatening project timelines and worker safety.

• Economic Stakes: The project is forecast to generate $35 billion in state revenues over its lifetime, with €4 billion in contracts already awarded to Mozambican firms.

• Regional Stability: Failure to secure Cabo Delgado could undermine confidence in frontier resource projects across sub-Saharan Africa.

The Fragile Security Architecture

The Mozambique Armed Forces (FADM) remain unable to independently contain the jihadist insurgency that forced TotalEnergies to invoke force majeure in April 2021, according to political observers and security analysts. Rwanda's intervention, coordinated bilaterally with Maputo, succeeded where the Southern African Development Community (SADC) mission failed—the latter withdrew in mid-2024 citing funding shortfalls.

Rwanda's Foreign Minister Olivier Nduhungirehe warned over the weekend that his country's troops would not remain without "sustainable financing guarantees." He bluntly criticized Western powers for benefiting from Rwandan security efforts while simultaneously sanctioning the RDF over its role in the Democratic Republic of Congo conflict. The United States, a key financial backer of TotalEnergies' operations, imposed sanctions on Rwandan forces in recent months due to the DRC situation, adding a layer of diplomatic complexity.

President Chapo told journalists in Brussels that both the Rwandan and EU training missions remain "current" and that Maputo has received no formal notice of termination. He acknowledged hearing "voices" about potential exits but insisted the government is monitoring the situation closely. The EU Military Assistance Mission in Mozambique (EUTM), led by Portugal and focused on training rapid-reaction forces, is authorized through June 2026.

A European Commission spokesperson confirmed "continuous dialogue" with Mozambique on future security support options but emphasized that decisions regarding the Rwandan deployment are the responsibility of the two countries under their bilateral agreement. In effect, Brussels is not committing additional funding, and Maputo will need to secure alternative arrangements or assume the financial burden itself.

What This Means for Residents and Investors

For Portugal-based investors and firms active in Lusophone Africa, the Mozambique gas story represents both opportunity and caution. The project's forward momentum validates earlier bets on the country's energy potential, but the security question marks underscore the inherent volatility of frontier markets.

Portuguese companies have historically been well-positioned to capitalize on Mozambique's development, given linguistic and cultural ties, and the gas sector is no exception. Portugal's own energy transition agenda—enshrined in the National Energy and Climate Plan—envisions importing more LNG as a bridge fuel while renewables scale up. Mozambique, with its enormous offshore reserves, fits naturally into that calculus, particularly as Europe seeks to avoid over-reliance on any single supplier.

Yet the Rwanda contingent's potential departure introduces execution risk. Insurgent groups, though weakened, maintain bases in forested areas around Macomia and southern Mocímboa da Praia districts. Any resurgence could delay first gas beyond 2029, disrupt supply commitments, or force costly security escalations. For Portugal-based asset managers or pension funds with exposure to African energy infrastructure, this is a material risk factor worth monitoring.

The broader question is whether Mozambique can assume full responsibility for securing its own resources. Analysts point to chronic underinvestment in the FADM, lack of transparency around bilateral security agreements, and institutional fragility. If the government opts to fund continued Rwandan or other foreign military support from anticipated gas revenues, that will divert resources from development priorities and could fuel public discontent in a country already grappling with post-election instability and flood recovery.

The Bigger Energy Picture

Mozambique's gas ambitions extend beyond TotalEnergies. ExxonMobil's Rovuma LNG project in the adjacent Area 4 block—valued at €26.1 billion ($30 billion) and designed to produce 18 million tonnes annually—lifted its own force majeure in November 2025 and is expected to reach a final investment decision in the first half of 2026. Production there is slated for 2030.

Meanwhile, Italy's Eni has been producing around 7 million tonnes per year since 2022 from the Coral Sul floating platform, and plans to double that capacity with the Coral Norte unit starting in 2028 (€6.2 billion investment). Combined, these three ventures position Mozambique among the world's top 10 LNG exporters within a decade—if security holds.

For Europe, the timing is fortuitous. The continent's LNG import infrastructure has expanded rapidly since 2022, and demand for non-Russian gas remains robust. Portugal's Sines LNG terminal, currently undergoing capacity upgrades, could serve as a natural landing point for Mozambican cargoes, feeding both Iberian and broader European markets via pipeline interconnections.

Yet the Cahora Bassa hydroelectric reservoir, Mozambique's largest power source, remains at roughly 50% capacity after historic lows last year, complicating the country's ability to supply electricity to energy-intensive industries like the Mozal aluminum smelter, which suspended operations on March 15. The gas projects depend on reliable domestic energy and infrastructure—both of which remain fragile.

Regional Diplomacy and Economic Pressures

President Chapo's Brussels trip this week was designed to court European investment and reassure stakeholders. At the RENMOZ renewable energy conference, he pitched Mozambique as a green energy hub, highlighting solar and hydro potential alongside gas. The messaging reflects a government eager to balance fossil fuel revenues with climate commitments and development needs.

Canada also signaled interest this week in supporting Mozambique's agriculture, tourism, and mining sectors, with a parliamentary delegation visiting Maputo. The Canadian High Commissioner emphasized anti-corruption efforts and technical training partnerships, suggesting Ottawa sees Mozambique as a long-term bet despite near-term volatility.

On the domestic front, Mozambique's credit to the economy fell for the third consecutive month in January, down to 286.2 billion meticais (€3.9 billion) from a peak of 292.8 billion meticais (€4 billion) last May. The prime lending rate has declined to 15.6%, down from a 24.1% high in mid-2023, but the central bank warns that recent floods—which affected 724,000 people and caused an estimated €600 M in damages—could push inflation back up.

The government is also considering raising tariffs on certain imports, including ceramics and food products, to protect nascent domestic industries. Trade Secretary Grispos Mutisse floated increasing duties from 7.5% to as high as 20%, coupled with stricter import licensing, in a bid to stimulate local manufacturing and reduce dependency on foreign goods. For Portugal-based exporters or importers active in Mozambique, such protectionist measures could reshape market access and pricing.

The Path Forward

The resumption of the TotalEnergies project is undeniably a win for Mozambique and its partners. The €4 billion in contracts awarded to local firms, the thousands of jobs created, and the promise of $35 billion in state revenues over the project's life represent transformative economic potential. The Mozambique LNG Foundation, endowed with $200 M, has already supported 7,000 farmers and fishers in Cabo Delgado and created over 8,000 indirect jobs.

But potential and delivery are not the same. The next two months will be critical. If Rwanda withdraws in May without a credible security replacement, investor confidence could wobble. If the FADM cannot demonstrate readiness to assume full counterterrorism responsibility, the risk premium on Mozambican assets will rise. And if insurgents sense an opening, the cycle of violence and displacement could restart.

For Portugal and the EU, the stakes are substantial. Mozambique's gas is not just an investment opportunity—it's a geopolitical hedge in an era of energy insecurity. The question is whether Maputo, Kigali, Brussels, and Paris can align interests and resources quickly enough to keep the momentum going. As Pouyanné put it in Brussels, maintaining "a good relationship between the President of Mozambique and me" is essential for a $20 billion bet. So, too, is maintaining security on the ground.