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Mozambique: LNG terminal will be built in Matola

The Matola Gas Company (MGC), in partnership with the French oil and gas company Total, has guaranteed the construction of a Liquefied Natural Gas (LNG) Terminal in the southern Mozambican port of Matola, in anticipation of declining gas production from the Pande and Temane onshore gas fields in Inhambane province.

The South African petrochemical company Sasol operates the Pande and Temane fields. The gas is processed at Temane, and an 865 kilometre pipeline carries it to Secunda in South Africa. A spur carries some of the gas for use by industries in and around Maputo.

The construction of an LNG terminal is intended to ensure the uninterrupted supply of gas to more than 30 industries in the Maputo/Matola area, and in future for export to other SADC (Southern African Development Community) countries.

Initially, the terminal will receive LNG from the international market, but later the LNG will come from Mozambique’s own reserves in the Rovuma Basin, in the far north of the country. Total is the operator of Rovuma Basin Area One, and heads the consortium that will produce LNG at plants built on the Afungi peninsula, in Palma district.

ALSO READ: Gigajoule and Total sign Joint Development Agreement for the importation of LNG and power generation

The Rovuma Basin LNG will replace the gas from Pande and Temane, which will go into decline as from 2024, as the reserves are gradually exhausted.

Interviewed by AIM, the MGC Chief Executive Officer, Bruno Morgado, said “the Pande and Temane gas will come to an end, and it must be replaced by finding other sources. That’s why we are going to push ahead with building an LNG terminal. We have to find a solution so that we can continue supplying gas to industries and to power stations in the southern region of the country”.

Construction of the terminal is expected to begin in the first quarter of 2021, with an investment of 300 million US dollars. The initiative also seeks to anticipate strategically the regional market, by creating LNG infrastructures, in order to capitalise on business opportunities.

ALSO READ: 2000 MW gas-fired power plant planned for Beluluane Industrial Park

Morgado believes that building an LNG terminal in southern Mozambique is crucial and urgent in order to attract businesses of the region – otherwise other countries will step in with initiatives of the same sort, and Mozambique will become a victim rather than a protagonist “which could be disastrous for the economy, and for ensuring the viability of businesses in energy and in other sectors”.

“If we don’t build an LNG import terminal, South Africa may advance before we do”, said Morgado. That could squeeze Mozambique out.

Morgado believed that, with the construction of an LNG terminal in Matola, Mozambique will be able to use the Rovuma Basin gas for the benefit of its own economy. He believed this would open the path for the construction of terminals elsewhere in the country, and eventually to the building of a north-south gas pipeline, as a viable solution to the distribution of Rovuma Basin gas inside the country and to other SADC members.

“Only if we make these projects viable, will we monetise the gas”, he added. “Instead of all the gas being taken to the western and Asian markets, it can be used in the country, adding value to a national resource. With these facilities, we will be able to export to South Africa and to the SADC region”.

ALSO READ:  Mozambique: Government greenlights two major power projects

Morgado argued that this will make Mozambique an energy hub, and cement its strategic position in the region.

He believed that the national energy panorama is promising, and can create attractive economic cycles. But to draw the greatest advantage from the sector, a large scale market for the gas must be created within Mozambique, with sufficient consumption to justify a north-south pipeline.

Source: Club of mozambique

Key energy deals in Mozambique move forward with major support from U.S. International Development Finance Corporation

On September 9, the Board of Directors of the U.S. International Development Finance Corporation (DFC) approved a loan of up to $200 million to Central Térmica de Temane and agreed to provide up to $1.5 billion in political risk insurance to support the commercialisation of natural gas reserves in Area 4 of Mozambique’s Rovuma Basin.

Together, the two deals represent a substantial investment by the United States that will improve access to energy, lay the foundation for transformational growth in Mozambique fuelled by the natural gas sector, and deliver on the U.S. Prosper Africa pledge announced last year in Maputo to increase U.S. investment in Africa.

DFC’s loan of up to $200 million to Central Térmica de Temane (CTT) will finance the development, construction, and operation of a 420-megawatt power plant and 25-kilometre interconnection line, which will diversify the country’s energy supply and reduce the cost of electricity. As around 33% of Mozambique’s population has access to electricity, this project will help Mozambique advance toward its goal of achieving universal access to energy by 2030.


DFC’s provision of $1.5 billion in political risk insurance will support the development, construction, and operation of an onshore natural gas liquefaction plant, along with supporting facilities. This energy project will provide a significant boost to Mozambique’s GDP as the country emerges as a top global gas exporter. Combined with forward-looking partnerships between the government and the private sector – the project has the potential to grow the economy to meet the needs of the Mozambican people.

U.S. Ambassador Dennis Hearne welcomed the news. “These projects will have a significant development impact in Mozambique, improve lives, and create a once-in-a-generation opportunity for the country to build a more prosperous future for all Mozambicans,” he said.

These projects and funding build on a foundation of more than $500 million in annual assistance the U.S. Government provides to improve the quality of education and healthcare, promote economic prosperity, and support the overall development of Mozambique.

DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. It was established by the 2019 passage of the BUILD Act (Better Utilisation of Investments Leading to Development), which strengthened and modernised American development finance. The BUILD Act combined the capabilities of the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority, which had previously been part of the U.S. Agency for International Development (USAID).

Source: Club of Mozambique

Sasol’s asset sale program advances with bids due for pipeline running from Mozambique to South Africa

  •  Fuel and chemical company has accelerated asset sales for debt
  •  Rompco gas pipeline runs to Sasol’s South African operations

Sasol Ltd. expects binding bids within weeks for its stake in a natural gas pipeline running from Mozambique to South Africa, as the company accelerates asset sales to pay off debt, according to people familiar with the process.

The bidding round underway for the Rompco 865-kilometer (537-mile) gas pipeline stake concludes in late July, according to two of the people who asked not to be identified because the information isn’t public. Sasol holds a 50% share, with two remaining 25% stakes owned by the South African and Mozambican governments.

The fuel and chemicals producer is trying to raise as much as $5 billion through asset sales amid cost overruns and lower oil prices. The company has moved quickly, with processes to sell stakes in its U.S. Lake Charles Chemicals Project and as recently as May was considering putting the Rompco share on the block, people familiar with the information said at the time.

Nedbank Group Ltd. is running the pipeline stake sale, according to one of the people. The bank declined to comment.

Sasol declined to comment specifically on the pipeline. The company is taking steps to reposition the business over the following 24 months, it said in a statement. “One of these measures will be our existing asset disposal program.”

The natural gas that Sasol processes from the Pande and Temane onshore fields in Mozambique and transports through the line will remain a part of the company’s efforts to lower its carbon footprint, Chief Financial Officer Paul Victor said last week in an interview.

The South African government, which owns 25% through its iGas unit, has expressed interest in a bigger stake in the line. Mineral Resources and Energy Minister Gwede Mantashe in a June 23 discussion said the country should focus on accessing Mozambique gas. “We are hoping to increase our shareholding in that.”

The department didn’t immediately respond to emailed questions over its interest in the pipeline.

By Paul Burkhardt and Loni Prinsloo

 — With assistance by Grace Huang

Source: Bloomberg

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