The gross domestic product (GDP) of Mozambique is expected to steadily increase by more than 20% from the first half of 2004. This is when a multimillion-rand pipeline, currently under construction, starts pumping natural gas from the Inhambane province in northern Mozambique to Secunda in Mpumalanga, South Africa.
Following years of negotiation since the early 1980s with the Mozambican government, synthetic fuels and chemicals giant Sasol has officially begun construction on a natural gas processing plant in the Temane gas field in Inhambane. An agreement has been signed between Sasol and ENH, the Mozambican national oil company, to grant the company pipeline rights in Mozambique, including access to the Temane and Pande gas fields. The South African government and
the South African Central Energy Fund (CEF) are also parties to the agreement.
The Projecto de Gas Natural consists of a gas field, an 865km pipeline, and the conversion of Sasol’s current gas pipeline network – including switching its Sasolburg plants from coal to gas. The pipeline, which will be owned by Sasol and the governments of South Africa and Mozambique, will supply natural gas to more than 600 industrial users in South Africa, as well as to Sasol’s factories and processing plants.
Over three years Sasol will construct gas production wells, collection pipelines and a gas-cleaning and drying facility, which will be located at the Temane field.
Work on the pipeline was inaugurated at a ceremony last week, attended by Mozambican President Joachim Chissano and President Thabo Mbeki as well as several government officials from both countries.
According to Sasol CEO Pieter Cox, although the actual building of the gas field and processing plant will be spearheaded by British company Foster Wheeler, “maximum use” will be made of local suppliers during the three-year construction period. The project is also expected to create about 1 000 jobs for locals. Cox says the agreement between Sasol and the two governments has also made provision for the future inclusion of black economic empowerment shareholders. Sasol says it has already signed memoranda of understanding with two prospective groups for local gas-distribution companies in Mpu-malanga and KwaZulu-Natal.
Speaking at the launch, Mbeki hailed the venture as the successful outcome of cooperation not only between two governments, but also as proof “that government and the private sector can work together constructively”.
As the main beneficiary of the gas field and pipeline Sasol plans to grow its current gas markets by promoting the Temane field’s natural gas as “a new world-class energy source”. Each government, however, will get a 25% share of the profits from the project.
Sasol plans to pump a fixed capital investment of more than R14-billion to the Mozambican natural gas project.