Mozambique to buy gas from South Africa’s Sasol

Mozambique is to buy six million gigajoules (GJ) of gas from South African petrochemicals group Sasol, according to the state-owned Empresa Nacional de Hidrocarbonetos (ENH).

Until now most of the gas produced from Sasol’s Pande-Temane onshore field in southern Mozambique has been used for the group’s synthetic fuels and chemicals operations in South Africa. The plant’s expanding capacity will see 27 million GJ of Sasol’s 183 million GJ being sold to Mozambican companies, with Mozambique receiving an additional nine million GJ in royalties.

Sasol is building a 30-km pipeline from Matola – where its current pipeline to South Africa passes – to neighbouring Maputo and on to Marracuene, north of the capital. The pipeline is expected to be completed by September at an estimated cost of $40 million.

The government is to subsidise the increased gas supply to Mozambican industry and services with prices 40 per cent cheaper than currently available. This subsidised rate will be passed on to residents from 2014.

Meanwhile significant discoveries of natural gas reserves in the Rovuma basin, on Mozambique’s border with Tanzania, are expected to attract investments of over $30 billion between 2013 and 2018, according to economists at Standard Bank.