Mozambican gas may boost SA
Facility in Matola harbour will be connected to nearby power plant and also feed gas into the existing SA network
Oil and gas group Total and clean energy project developer Gigajoule have signed a joint development agreement to import gas into Mozambique in a move that could drive a big SA gas market.
Oil and gas group Total and clean energy project developer Gigajoule have signed a joint development agreement to import gas into Mozambique in a move that could drive a big SA gas market.
The project will result in liquefied natural gas (LNG) being delivered to a permanently moored floating storage and regasification unit in the Matola harbour, adjacent to Maputo, which is Mozambique’s capital city.
The facility will be connected to a nearby gas-fired power plant, and feed gas into the existing SA gas network, through the infrastructure of the Matola Gas Company, in which Gigajoule is a major shareholder. SA aims to establish a gas economy, and in terms of the latest Integrated Resource Plan, the country’s energy road map, about 3000MW of gas-fired power will feed into the national power grid by 2030.
Gas is an important source of flexible power that helps to balance a power grid as more renewable power is introduced into a system, but the plan makes no provision for where the gas might come from.
Sasol, the main importer of gas into SA, is on the hunt for feedstock as its Pande and Temane fields in Mozambique run dry.
The synthetic-fuels company is looking to increase its gas use as it comes under pressure to reduce its reliance on coal at its highly polluting Secunda operations in Mpumalanga. Though there has been great fanfare about the development of significant gas reserves in Rovuma, northern Mozambique, some industry observers have suggested it is unlikely to supply SA, given the geographical distance and the expense of a pipeline.
Not only will the Matola facility come online far quicker than the Rovuma projects, it is also closer to the SA market and the existing Rompco pipeline, which since 2005 has brought Mozambican gas into SA, primarily for use in Sasol’s operations although it does service other industrial users.
Johan de Vos, MD of Gigajoule, said there was spare capacity on the Rompco pipeline, owned only partially by Sasol and effectively an openaccess pipeline regulated by the National Energy Regulator of SA.
The joint development agreement between Total and Gigajoule that was signed on Wednesday is a commitment by the parties to formally undertake the project together.
The gas pipeline network, harbour infrastructure and the connection to the SA gas pipeline network will cost about $350m (R5.1bn). The cost of the 2,000MW power plant is about $2.8bn.
Paul Eardley-Taylor, Standard Bank’s head of oil and gas for Southern Africa, said the bank was excited by Matola’s potential contribution to solving regional energy challenges.
“The agreement involves existing companies with specific skills to offer a fast-track deal,” he said.
Matola Gas Company has infrastructure and operations, while Total has the available LNG.
“Crucially, the deal offers multiple routes to market in SA for existing gas demand areas, such as Gauteng and Mpumalanga, well ahead of any formal SA LNG import tender,” Eardley-Taylor said.
THE AGREEMENT INVOLVES EXISTING COMPANIES WITH SPECIFIC SKILLS TO OFFER A FAST-TRACK DEAL