• TotalEnergies warns U.S. steel tariffs raise LNG project costs
• Mozambique LNG restart unlikely before 2029 amid security, cost issues
• Energy sector faces margin pressure from rising input and trade barriers

TotalEnergies CEO Patrick Pouyanné warned on Tuesday, October 14, that new U.S. steel tariffs are set to drive up construction costs for major gas developments, including the Mozambique LNG project.

Speaking at the Energy Intelligence Forum in London, Pouyanné said the higher duties “will inevitably push up the cost of building LNG facilities.” His remarks highlight the renewed rise of protectionist trade policies in the United States.

Last June, the second Trump administration raised tariffs on imported steel and aluminum to 50%, offering no exemptions for materials critical to oil and gas projects, such as oil-country tubular goods and the steel frameworks used in liquefaction plants.

An EY analysis estimates that the new tariffs will lift steel input costs for the oil and gas sector by 5.6%, with knock-on effects on equipment prices and logistics.

Pouyanné’s concerns echo the challenges facing TotalEnergies’ $20 billion Mozambique LNG project, which has been on hold since 2021 following militant attacks in the Cabo Delgado province. Despite improved security, the company does not expect to restart operations before 2029.

Rising construction costs add pressure to an already complex environment marked by lingering security risks and the need for “a strong alignment between the Mozambican government and investors,” Pouyanné said.

Other industry leaders share the concern. Baker Hughes CEO Lorenzo Simonelli has projected that the tariffs will add more than $100 million in costs for his company this year, underscoring the squeeze on margins across the energy supply chain.

For TotalEnergies, resuming work in Mozambique will depend both on progress toward lasting security in the north and on the broader global trade context. In an industry built on international supply chains, the new U.S. trade barriers could further delay completion of this strategically vital regional project.

Olivier de Souza