Justi\u00e7a Ambiental!<\/a><\/p>\n\n\n\nIn January, Italian company ENI announced it would be ready for the Final Investment Decision for its Coral North FLNG project, but now states it is still negotiating with private banks for financing, and seems to blame the delay on the Mozambican authorities. In the meanwhile, one investor has been sued by a civil society organization, and four private banks have already excluded financing for the project.<\/p>\n\n\n\n
Coral North FLNG, a planned floating platform to extract and liquefy gas off the coast of Mozambique, is still looking for backers. Although Eni declared in January that it was ready to take the FID on the project, last week, in the context of its AGM, it admitted to shareholders that \u201cnegotiations with private financial institutions are underway\u201d. When asked about the reasons for the delay in closing the deal, ENI only replied that the development plan was approved by the Mozambican authorities in April 2025, implying they were responsible.<\/p>\n\n\n\n
ENI leads work on Coral South FLNG, the only operational project in the Rovuma Basin. It is a\u00a0floating processing plant anchored in deep ocean that has been exporting LNG since\u00a0November 2022. Coral North FLNG would be a replica, gouging its claws into the sea floor\u00a0just 10 kilometres away, compounding the impacts on the ecology of the area.
Answering to the AGM questions, ENI also confirmed that \u201cpart of the project requirements\u00a0are planned to be financed through debt\u201d and with \u201csupport from a number of Export Credit\u00a0Agencies\u201d, as for Coral South FLNG. However, different private finance actors are moving\u00a0towards withdrawal from unconventional upstream oil and gas in order to achieve carbon\u00a0neutrality by 2050. At least four of the banks that supported the first project \u2013 BNP Paribas,\u00a0Credit Agricole, UniCredit and ABN Amro \u2013 say they are no longer interested in financing the\u00a0replica because it is not in line with their updated climate change policy.<\/p>\n\n\n\n
Just over three years since the massive vessel arrived in the Cabo Delgado region, Coral\u00a0South has seen multiple cases of excessive flaring \u2013 the burning of excess extracted gas,\u00a0which results in significant carbon emissions. As a replica, Coral North would likely be\u00a0subject to similar issues. An investigation published in April by Italian civil society\u00a0organization, ReCommon, revealed that total emissions from Coral South have been\u00a0assessed at levels seven times higher than declared in the original environmental impact\u00a0assessment (EIA). Between June and December 2022 alone, flaring emissions from the Coral South FLNG project accounted for 11.2% of Mozambique\u2019s annual emissions, reflecting an\u00a011.68% increase compared to 2021.Proceeding with gas development in the Rovuma Basin ignores the International Institute for Sustainable Development findings indicating that investment in additional gas infrastructure is incompatible with the goal of limiting global warming to 1.5\u00b0C. International Energy Agency analysis also reveals that, in a 1.5\u00b0C scenario, existing LNG export capacity would\u00a0already be sufficient to meet current and future demand.<\/p>\n\n\n\n
With gas demand declining worldwide, Coral North carries high financial risk, prompting\u00a0South Korean civil society organisation, Solutions for Our Climate (SFOC) to attempt to stop\u00a0state investment in the project. In February, Korea Gas Corporation (KOGAS) announced a\u00a0decision to invest USD 562 million in the project through equity and a loan to its subsidiary,\u00a0KG Mozambique. In March, SFOC sued KOGAS, arguing that the investment is economically\u00a0risky for South Korea, and the project would contribute significantly to climate change\u00a0impacts and therefore violate the rights of future generations to a healthy environment.
Between 2008 and April 2024, KOGAS had already invested around USD 1 billion in\u00a0Mozambique gas development, but has refused to disclose the preliminary feasibility study\u00a0(PFS) for Coral North. SFOC also has an ongoing case against KOGAS for disclosure of the\u00a0PFS.<\/p>\n\n\n\n
Two other projects in the Rovuma Basin are planning significantly larger onshore processing facilities, intending to pipe gas from wells about 50 km offshore, Mozambique LNG and\u00a0Rovuma LNG. The environmental impacts of the four gas projects together over their entire\u00a0lifetimes could be devastating for the Rovuma Basin and the west Indian ocean. The\u00a0Environmental Impact Assessment for the Coral North Project has been criticised for failing\u00a0to meet legal and scientific standards in assessing environmental and climate risks.\u00a0The Mozambique LNG project, led by French fossil giant TotalEnergies remains under\u00a0international scrutiny. The project is under force majeure since April 2021, following a\u00a0violent insurgent attack. It is now under investigation following reported allegations of a\u00a0massacre of civilians that was allegedly committed near the Afungi gas complex in mid 2021\u00a0by public security forces. Mozambique LNG shares land-use rights and some infrastructure\u00a0with the Rovuma LNG project, which is led by ExxonMobil, with ENI and China National\u00a0Petroleum Corporation as major partners. The project also remains without a final\u00a0investment decision.<\/p>\n\n\n\n
The development of LNG projects in Mozambique also presents severe concerns about erosion of sovereignty, due to the legal agreements that limit the government\u2019s ability to regulate these projects and capture fair revenues. Since gas exploitation began around 2010, the industry has been linked to significant corruption-driven debt, and the government supports its national oil company\u2019s participation in LNG projects, creating fiscal risk without guaranteed returns. Local communities have already lost agricultural lands and access to thesea because of the infrastructure development, and hundreds of families were required to relocate.<\/p>\n\n\n\n
Gas revenues so far amount to just over USD 200 million, of which 40% is intended for the Sovereign Wealth Fund, which was established for stability and savings for future generations. Last week the Mozambique Administrative Court reported numerous irregularities in the Financial State Account for 2023 that represent an alleged \u201cembezzlement\u201d of USD 33 million from Rovuma Gas revenues. In addition, Mozambican civil society is raising concerns about the funds being allocated to social and economic projects as provided for in the State Budget.<\/p>\n\n\n\n
Developing Mozambique\u2019s LNG industry promises only more harm \u2013 ecological destruction and climate change impact, the destruction of people\u2019s livelihoods, and increased disenfranchisement and inequality. This is risky business for public and private financial investors.<\/p>\n","protected":false},"excerpt":{"rendered":"
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