South African petrochemical group SASOL and the governments of South Africa and Mozambique will invest US$120 million to build a new pipeline that will be operational in 2017. This company – Republic of Mozambique Pipeline Investment Company (ROMPCO) – is a partnership between the SASOL group, Companhia Moçambicana de Gasoduto and South Africa’s Gas Development Company (SOC) Limited.
The addition of this new pipeline, with a length of 127 km, will allow South Africa to receive 212 million gigajoules of gas, compared to 188 million gigajoules currently, by sending natural gas to the South African group from the Pande and Temane fields in Inhambane province.
There are some 3,000 bn cubic feet of natural gas in two Mozambican fields, but the country has no market for it. South Africa, across the western border, has a staggering annual demand for 120 mn gigajoules (gj) of electricity, but no gas to generate it. In 2003, a partnership between the two countries and some $1.2 bn investment by SASOL, brought the construction of an 865-kilometre pipeline. Since then, it has ferried gas from the Temane and Pande fields in Mozambique to a distribution network in Secunda, South Africa. It was called ‘Loop Line 1.’ It is now being scaled up.
Construction of the first pipeline, called ‘Loop Line 1’, cost US$200 million, and Louis Bosch, Director-General of ROMPCO, said in a statement that the new pipeline or “Loop Line 2″ represents the company’s commitment to invest in development of Mozambique’s infrastructure, as well as the use of local suppliers.
It is a deal that benefits both countries. The gas partnership is forecast to boost Mozambique’s gross domestic product (GDP) significantly and local employment, as the ‘Loop Line 1’ generated a 2,400 job opportunities, which the ‘Loop Line 2’ project is forecasted to surpass. The Mozambican government will receive some $2 bn in royalties and taxes over the project’s 25-year lifespan. The collaboration will provide South Africa with a steady stream of gas for a quarter of a century, based on projected production and consumption rates. Clean natural gas from Mozambique will not only help stimulate the South African economy, but will also help reduce pollution as the country seeks to clean up its dirty industries. The new pipeline will run parallel to part of the first pipeline, which is 865 km long and links the Temane gas field to the SASOL plant in Secunda, South Africa.
SASOL, which owns 50% of ROMPCO, said the natural gas is meant for, among other uses, heating in industries, re-selling to businesses and power generation. Pretoria and Maputo each own 25% of ROMPCO through local firms. Africa’s most industrialized economy is facing a shortfall in electricity supply, that earlier this year resulted in frequent power cuts that hurt businesses and deterred investors.
Source 1 2 3