McDermott International at Work on North American,

Mozambique's liquefied natural gas (LNG) sector is entering a critical execution phase, with McDermott International taking on major engineering, procurement, and construction (EPC) responsibilities across both its North American portfolio and the high-stakes Mozambique LNG projects. This dual-continent mandate signals growing confidence in Mozambique's position as a strategic energy hub—but also reflects the complex geopolitical and logistical realities shaping African energy investment today.

## What is McDermott's Role in Mozambique's LNG Expansion?

McDermott International, a global EPC leader specializing in offshore energy infrastructure, has secured contract awards to design and build critical components of Mozambique's LNG export platform. The company is simultaneously managing North American liquefaction and pipeline projects, which demonstrates its capacity to juggle competing timelines across two continents. In Mozambique, McDermott's scope includes offshore installation, subsea engineering, and topside systems integration—the most capital-intensive and technically demanding elements of LNG production.

The Mozambique LNG project, anchored by TotalEnergies' Area 1 development, targets first LNG export by 2026, pending security stabilization in the Cabo Delgado province. The total project value exceeds $20 billion USD, making it one of Africa's largest energy infrastructure programs. McDermott's engagement underscores the scale and seriousness of international operators' commitment, despite well-documented security challenges that have delayed the project multiple times since 2019.

## Why Does This Matter for African Energy Investors?

The visibility of a tier-one contractor like McDermott on Mozambique LNG carries three immediate signals. First, it confirms that major operators believe production timelines are realistic enough to lock in long-lead capital commitments. Second, it creates a supply-chain multiplier effect: McDermott's work attracts sub-contractors, logistics providers, and skilled-labor pipelines that benefit neighboring economies. Third, it validates Mozambique as a credible LNG exporter to international markets—critical for sovereign bond ratings and attracting downstream offtakers.

However, execution risk remains acute. Insecurity in Cabo Delgado has claimed over 4,000 lives since 2017, and military intervention (including South African and regional forces) has only recently stabilized key infrastructure zones. Any security deterioration could trigger force-majeure clauses, cost overruns, and schedule slippage—a pattern Mozambique LNG has experienced twice already.

## How Does Mozambique LNG Compete Globally?

Mozambique's LNG costs are highly competitive due to low upstream development expense and favorable geology. Production is expected to reach 12.88 million tonnes per annum (mtpa) by 2028, positioning Mozambique as Africa's second-largest LNG exporter after Nigeria. With 180+ tcf of natural gas reserves offshore, the country has 50+ years of production potential—attractive to long-term contract buyers in Asia and Europe seeking supply diversification away from Russian and Middle Eastern sources.

McDermott's involvement signals that international operators view Mozambique's regulatory stability (despite security concerns) and resource quality as worth the execution risk. For portfolio investors, this is a vote of confidence in the macro-energy story: Africa's LNG supply will grow meaningfully over the next decade, and Mozambique will be central to that narrative.

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