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(Repetition of the story for a wider audience. No changes to the text.) by Forrest Crellin
Credit Agricole CAGR.PA said on Monday it would not provide financing for two major liquefied natural gas (LNG) projects, citing its commitment to refrain from any new fossil fuel developments.
The move follows pressure on banks from environmental groups to steer their investments away from oil and gas projects that contribute to global warming. Barclays, HSBC and BNP Paribas have tightened their oil and gas lending.
The French bank said it would not finance Exxon Mobil XOM.N and Eni ENI.MI’s Rovuma project in Mozambique, nor the Papua New Guinea LNG project, backed by TotalEnergies TTEF.PA. Santos STO.AX and Exxon Mobil.
Crédit Agricole was the initial advisory bank for the Papua LNG and Rovuma LNG projects.
Exxon Mobil and TotalEnergies did not respond to requests for comment, and it was unclear whether Crédit Agricole’s decision would affect project development timelines.
“The decision not to finance the project is a major blow to the project and TotalEnergies, and it could jeopardize their ability to finance the project,” said Lucie Pinson, of Reclaim Finance, of the export facility. LNG from Papua.
If another bank wants to step in and take over the role, it will have to start from the beginning, Ms. Pinson added.
“Credit Agricole must now show consistency and stop supporting the LNG project in Mozambique that TotalEnergies is currently seeking to relaunch,” said Lorette Philippot, Private Finance campaigner at Friends of the Earth France.
Oil and gas companies have launched LNG projects to meet demand for refrigerated gas which is expected to increase by 50%, to around 650 million metric tons per year by 2040.
A host of new construction projects in Asia, Qatar, Canada, Mexico and the United States will compete for buyers.
With the announcements made by banks in Europe, pension funds in the United States are making it more difficult to raise capital, said a person familiar with development finance.