U.S. Throws Down Gauntlet to China With Mozambique LNG Loan
U.S. Throws Down Gauntlet to China With Mozambique Gas Mega-Loan
(Bloomberg) -- U.S. President Donald Trump’s sparring with China is playing out in an unlikely new arena: the sandy turf of northern Mozambique, one of the world’s poorest countries.
The U.S. Export-Import Bank on Thursday approved the broadened scope of a $4.7 billion loan to back American suppliers to a liquefied-natural-gas development that could transform the southeastern African nation’s economy. The lender said China and Russia had both been considering helping finance it.
“We were told that China and Russia were slated to finance this deal,” Kimberly A. Reed, the bank’s president, said in a statement. “This is a great example of how a revitalized Exim, thanks to President Trump’s leadership and bipartisan support from Congress, can help ensure the use of ‘Made in the U.S.A.’ products and services, without ceding ground to countries like China and Russia.”
The Exim Bank helps foreign companies buy American products when private lenders won’t provide financing, with one of its goals being to “advance the U.S.’s comparative leadership in the world with respect to China.” The appointment of three Trump-appointed nominees to the bank’s board in May 2019 helped provide the quorum needed to restore its ability to approve deals worth more than $10 million for the first time since 2015, smoothing the way for its participation in the Mozambique project.
Anadarko Petroleum Corp., based in Woodlands, Texas, initially led the Mozambican project that was sold on to French oil major Total SA. U.S. companies including McDermott International Inc. have been awarded contracts worth billions of dollars to help build the facility -- work that Exim Bank said could support 16,700 American jobs over the five-year construction period.
China has a well-established presence in Mozambique. It funded and built Africa’s longest suspension bridge in the capital, Maputo, and has invested in a massive hotel and conference center there. Russia has made more recent inroads, winning some oil and gas licenses and reportedly supplying mercenaries to beat back insurgents operating in the vicinity of the gas project.
Total’s project is the smaller of two developments that aim to tap Mozambique’s massive natural gas reserves. The other is now led by Exxon Mobil Corp. Its notable partners include China National Petroleum Corp., which could complicate any bid to secure Exim bank financing of its own.
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