by Simone Ogno, ReCommon
Originally published in Nigrizia.
ENI’s Coral North FLNG project is a floating platform designed for gas extraction and liquefaction off the coast of Mozambique. It is essentially a copy of Coral South FLNG, which has been operational and exporting fossil gas (LNG) since the end of 2022. If the second project is also built, the two platforms would be only 10 kilometers apart. During the last year, there have been several news items about reaching final investment decision (FID) for Coral North FLNG: at the beginning of 2025 it seemed to be a done deal. Instead, so far, there has been nothing but a series 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. The delay of about ten months had led industry experts to begin to doubt that the financial plan would be approved in 2025.
There are many reasons for this delay, starting with the socio-political instability in Mozambique. Between October 9, 2024, and January 2025, the country went through the most complex situation in its recent history. The institutional crisis triggered after the October presidential elections, which Daniel Chapo finally won, seems to have subsided, but tensions with opposition forces risk leading to new episodes of repression by the armed forces, while previous protests cost life to dozens of people.
A decisive factor – which has remained all too much under the radar in Europe – concerns the potential contribution of the fossil fuel industry to the economic structure of the African country. Back in December last year, the Centro de Integridade Publica (CIP) denounced that ENI was allegedly pressuring Felipe Nyusi’s outgoing government about signing a contract for the Coral North FLNG project without two essential clauses to the Mozambican economy: the possibility of paying the production tax in kind such as gas, rather than cash;and the requirement for local content, meaning that a significant part of the goods, services and labour employed in the projects comes from Mozambique. While ENI strongly rejected these accusations, both the Confederation of Economic Associations of Mozambique (CTA) and the Chapo government itself used them as a battleground: a sign that, if not pressure, there were at least strong differences of opinion. For the moment, the CTA and the Mozambican government seem to have emerged victorious from the clash.
There are also potential environmental and climate impacts associated with Coral North FLNG. Public data and satellite images analyzed by ReCommon and its consultants in March 2025 show that the twin Coral South FLNG project has been involved in numerous flaring incidents since it began operating in 2022, and they have not been adequately reported by ENI. “Flaring” is the practice where excess gas extracted with other hydrocarbons is burned off, which has a massive impact on the climate, the environment, and the health of local communities.
During the shareholders’ meeting on May 14, 2025, ENI stated that in the period “from January 24, 2024 to May 4, 2025, only nine plant restart cases occurred (significantly better than the benchmark for similar plants). In these cases, only the amount strictly needed to ensure the safety of people and facilities, as planned, was burnt.”
Nine plant restarts are not few, and it is unclear what standard ENI used. What is clear is that, according to World Bank data, in 2024 Coral South FLNG flared 71 million cubic meters of gas, which means 184,600 tons of carbon dioxide equivalent (tCO2e). [1] The total emissions from the entire value chain of the two platforms during their expected 25 years of operation are estimated to reach 1 billion tons of CO2e. This is more than three times Italy’s emissions in 2023 alone.
Coral North FLNG is supposed to be the twin project of Coral South FLNG: will it 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 Thursday, October 2nd. However, construction of the floating platform components has been proceeding apace for months, even without a financial framework. Compared to Coral South FLNG, could it mean that ENI will increase the project equity and seek less debt financing on the market? This is a rather unusual move, which would entail potential economic and financial risks. The gradual withdrawal from the new project of several European banks that had financed the previous Coral South FLNG certainly does not help.
On the Italian side, another element must also be considered. If ENI requests financial support from the public insurer SACE – as it is likely, there would be a potential conflict of interest, since the two companies “share” a member on their respective boards of directors. In addition, SACE has just gone through a turbulent period of internal restructuring, how will it respond? What will be the reactions of politicians and public accounting control bodies?
Although the FID has been signed, at the moment 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.