OWN CORRESPONDENT, Johannesburg | Wednesday 6.00pm.
GOVERNMENT on Wednesday approved state-owned oil-from-gas producer Mossgas’s plans to develop new offshore gas fields at an estimated cost of R2,2-billion.
Mossgas chairman Keith Kunene said the development of the EM and associated gas fields in the Bredasdorp Basin will save South Africa more than R1,5-billion a year in imported fuels.
The funding for the project is to come from the Central Energy Fund, which will obtain additional commercial and foreign finance to protect the foreign exchange reserves and balance of payments, Kuene said. These loans will be repaid from future Mossgas operating surpluses.
The project entails drilling production wells in the EM and associated gas fields and connecting them by means of sub-sea pipelines to the existing offshore platform on the FA field, 49km to the east. “The existing reserves will be depleted in 2001 and the new project will ensure continuity of gas supply and profitable operation of Mossgas until at least the year 2006,” Kunene said.
He said independent experts had verified the commercial and technical viability of the project, which is expected to earn a net cash surplus in nominal terms of R4,36-billion.