French bank Credit Agricole said it will not finance two large LNG projects as it considers them an extension of fossil fuel developments. The decision comes as banks face pressure to move away from lending to oil and gas projects.

The bank declined to fund the Rovuma project in Mozambique, run by ExxonMobil and Eni, and the Papua New Guinea LNG project, backed by TotalEnergies, Santos and ExxonMobil. Credit Agricole was the first financial adviser on both projects.

Lucie Pinson of Reclaim Finance told Reuters: “The decision to not finance the project is a serious blow to the project and TotalEnergies, and it could undermine their ability to finance the [Papua LNG facility] project.”

Shell has predicted that global demand for LNG will rise by more than 50% by 2040, as LNG is a cornerstone of economic growth in China and nations in South and South East Asia. In 2023, China overtook Japan as the world’s top LNG importer.

Meanwhile, in Europe, LNG has become an important source of energy security in the past two years following Russia’s full-scale invasion of Ukraine, which prompted the transition away from Russian gas.

Oil and gas companies have moved into the market to accommodate for the rise in demand. This week, ExxonMobil announced that it is ahead of schedule with its plan to double the size of its LNG portfolio to 40 million tonnes per annum (mtpa) by 2030 and will focus on producing its own gas rather than trading that of third parties.

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The Golden Pass LNG project, in which Exxon holds a 30% stake with QatarEnergies as a partner, is an example of the company’s own production project. Golden Pass will produce its first LNG in 2025 and have an export capacity of around 18mtpa.