published on Nigrizia.it
ENI’s new project in Mozambique, Coral North FLNG, seems to have finally reached a turning point: the Italian energy company and its four partners have reached the Final Investment Decision (FID), which is basically the financial plan for building the infrastructure and the step that marks the start of the initiative.
Coral North FLNG consists of a floating platform designed for gas extraction and liquefaction off the coast of Cabo Delgado, Mozambique’s northernmost province. For eight years now, the area has been the scene of a conflict between Mozambique Armed forces and militias claiming affiliation with the Islamic State.
The project is in fact a replica of Coral South FLNG, which is already operational and exporting fossil gas (LNG) from the end of 2022. There has been talk of the FID for Coral North FLNG since last January, and at the beginning of this year it seemed a done deal. Instead, there has been nothing but a litany of postponements and denials.
Without the FID, banks and export credit agencies such as Italy’s SACE cannot effectively assess whether or not to support a major infrastructure project with their money. This delay of about ten months had led industry experts to doubt that the financial scheme would see the light of day by 2025.
Chronicle of a delay
There are many reasons for the delay, starting with the socio-political instability in Mozambique. Between 9 October 2024 and spring 2025, the country went through its most complex phase in recent years. The institutional crisis triggered after the October presidential elections – which saw the victory of Daniel Chapo, candidate of the FRELIMO party that has ruled Mozambique for 50 years – seems to have subsided, but tensions with opposition forces risk leading to new episodes of repression by the armed forces, after previous incidents cost the lives of hundreds of people.
A decisive factor – but one that has remained all too much under the radar outside Mozambique – concerns the potential contribution of the fossil fuel industry to the economic fabric of the African country. Back in December last year, the Mozambican civil society organisation Centro de Integridade Publica (CIP) denounced alleged pressure exerted by ENI on Filipe Nyusi’s outgoing government to remove two clauses relevant to the Mozambican economy from the Coral North FLNG contract: the payment of production tax in the form of natural resources such as gas, rather than cash; the increased use of local labour, goods and services for the implementation of the project. While ENI strongly rejected these accusations, both the Confederation of Economic Associations of Mozambique (CTA) and the Chapo government itself made them a point of contention: a sign that, if not pressure, there were at least strong differences of opinion. It is a battle from which the CTA and the Mozambican government seem to have emerged victorious for the time being.
The issue of flaring
Then there are the potential environmental and climate impacts associated with Coral North FLNG. Analysis of public data and satellite images examined by ReCommon and its consultants in March 2025 shows that Coral South FLNG project has been involved in numerous flaring incidents since it began operating in 2022, which have not been adequately reported by ENI. Flaring is the practice of burning off excess gas extracted along with other hydrocarbons, which has significant impacts on the climate, the environment and – in the vicinity of populated areas – on people.
During ENI’s shareholders meeting on 14 May 2025, the company stated that in the period “from 24 January 2024 to 4 May 2025, there were only nine instances of plant restart (significantly better than the benchmark for similar plants). In these episodes, only the amount strictly necessary to ensure the safety of people and plants was burned, as planned”.
Nine plant restarts are not insignificant, and it is unclear what parameters ENI used. What is certain is that, according to World Bank data, in 2024 Coral South FLNG flared 71 million cubic metres of gas, which translates into 184,600 tonnes of CO2e (carbon dioxide equivalent). In general, the total emissions associated with the entire value chain of the two projects during their expected 25 years of operation would amount to 1 billion tonnes of CO2e, i.e. more than three times Italy’s emissions in 2023 alone.
If Coral North FLNG is the replica of Coral South FLNG, does this mean that it will also replicate the flaring episodes or will corrective measures be taken? Are the potential financial sponsors of the project – export credit agencies and commercial banks – aware of this situation?
The FID for Coral North FLNG was only officially announced on 2 October 2025. However, construction of the floating platform components has been proceeding apace for months, even without a financial framework. Does this mean that, compared to Coral South FLNG, ENI will increase its equity share and seek less debt financing on the market? This would be a rather unusual move, which would entail potential economic and financial risks. The gradual withdrawal from the project of several European banks that had financed Coral South FLNG certainly does not help.
The unkown factor of SACE
On the Italian front, another factor must also be considered. If, as is likely, ENI were to request financial support from Italy’s export credit agency SACE, there would be a potential conflict of interest, as the two companies “share” a member on their respective boards of directors.
How will SACE, which has just gone through a turbulent period of internal restructuring, respond? What will be the reactions of political institutions and public accounting control bodies?
Certainly, although the FID has been signed, there is still no direct involvement of either export credit agencies or commercial banks. It follows that the actual financing of the project will not take place before November 2025, at the earliest.
Only rigorous social, environmental and economic due diligence can ensure that ENI’s fossil gas does not sneak in and devour yet another piece of Mozambique.
