Italy's Saipem sees Mozambique LNG project restarting by end of summer

MILAN (Reuters) -Italy's Saipem is confident that a $20-billion liquefied natural gas project in Mozambique for TotalEnergies will restart by the end of the summer, the CEO of the energy contractor said on Thursday.

Covered by force majeure since 2021 following insurgent attacks, the Mozambique LNG project includes developing the Golfinho and Atum natural gas fields in the Offshore Area 1 concession and building a two-train liquefaction plant.

The contract for Saipem is worth around 3 billion euros ($3.5 billion).

"The restart is made of a progression of activities that will take place this summer ... lifting the force majeure is one of these steps," Saipem's Alessandro Puliti said in a press briefing after second-quarter results.

TotalEnergies CEO Patrick Pouyanne said last month that he expected the project to resume development "this summer".

Puliti played down media reports that the project site would be accessible to workers only by sea due to security reasons.

"Much of the equipment needed for the project is transported to the site where the LNG plant is being built by sea for logistical rather than security reasons," Puliti said.

Milan-based Saipem and its Norwegian rival Subsea7 confirmed earlier in the day that they would merge to form a leading global player in offshore energy services.

The merger terms align with those outlined in February's memorandum of understanding, the companies said.

The combination is expected to be completed in the second half of 2026, Puliti confirmed, adding that getting approval from all the relevant authorities would take around 12 months from now.

Britain's competition regulator said on Thursday it was considering whether the merger could affect competition within the oil services market.

Saipem reported on Wednesday a 39% year-on-year rise in second-quarter core earnings to 413 million euros.

New contracts acquired in the period dropped to 2.2 billion euros, compared to 5.085 billion euros in the same period of last year, but the group confirmed its expectations for order intake in the full-year worth around 12 billion euros.

($1 = 0.8513 euros)

(Reporting by Francesca Landini)