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Mozambique: Government committed to produce zero carbon natural gas

Mozambique’s Minister of Mineral Resources and Energy, Max Tonela, this Friday reiterated the country’s commitment to exporting carbon-free natural gas, using technologies which curb pollutant emissions by oil companies.

“The government has decided to embark on a gas decarbonisation process. Although we have a gas that already has a small emission content, we are prioritising the use of pre-existing decarbonisation technologies,” Minister Tonela said.

Speaking to journalists about the future of fossil energy in the face of growing global concern about climate change, the minister noted that the oil industry had developed technologies to remove carbon from gas and return the pollutant to its source, with a view to exporting a clean product.

Max Tonela said that Mozambican natural gas has little “polluting content”, and will be decisive in deactivating coal-fired power stations in southern Africa and elsewhere, in the context of reducing carbon dioxide emissions.

“We are going to see an increase in gas consumption, as it is the least polluting among fossil fuels, and we are also going to see an accelerated increase in renewable energies, which are still an intermittent energy source,” Minister Tonela said.

Mozambique, with its huge gas deposits, wants to be an active player in decarbonisation, using the resource for the economic development of the country, of southern Africa and other countries, he added.

Source: Club of mozambique

Mozambique: Enserve renews maintenance contract with Sasol

Mozambican company Enserve this week announced the renewal of its existing valve maintenance contract with Sasol at the Temane Power Plant project in Mozambique.

According to a note from the company, under the new agreement in force from 30 June 2021, Enserve Moçambique will continue to provide maintenance and refurbishment services for control and shut-off valves at the Temane processing facility.

“We are pleased to further expand our already close partnership with Sasol Temane,” Enserve Mozambique country manager Paulo Chibanga said. “Based on our excellent and trusted relationship, I believe that extending this successful cooperation will allow us to improve and continue to deliver world-class technical expertise and services to the further benefit of Sasol’s production, competence and capabilities.”

According to the same note, the renewed contract will also allow Enserve to access a growth platform by providing stability, which gains particular relevance at a time when the oil and gas industry was experiencing uncertainty as a result of the Covid 19 pandemic.

Source: Club of mozambique

TotalEnergies Mozambique LNG project may resume within 18 months: AfDB

TotalEnergies’ liquefied natural gas (LNG) project in Mozambique could be back on track within the next 18 months after African armies deployed to help quell an insurgency, the president of the African Development Bank (AfDB) said on Friday.

The French energy giant declared force majeure on the $20 billion project in April after Islamic State-linked fighters overran the town of Palma, on the doorstep of its facilities in the northern Cabo Delgado province. It estimated at the time the disruption would delay development by at least a year.

Troops from Rwanda and members states from the Southern African Development Community (SADC) have since deployed to support Mozambican forces to help put down the insurgency.

AfDB president Akinwumi Adesina told Reuters he did not expect the interruption to affect the LNG project’s long-term viability.

“The return of security in that place will give assurances to Total and others to return,” he said. “In one year to 18 months, I expect it to be stabilised enough to get back on track.”

TotalEnergies declined to comment on Adesina’s remarks.

The AfDB is lending $400 million to the project, which is Africa‘s largest ever foreign direct investment and a lynchpin of Mozambique’s economic development strategy.

“It gave us real concern when Total declared force majeure and they had to move out. But you can understand because of the insecurity situation,” Adesina said.

Southern African nations agreed in June to send troops to assist Mozambique, and Rwanda, which is not a SADC member, deployed 1,000 soldiers a month later.

Mozambican President Filipe Nyusi has said the army is now retaking ground in Cabo Delgado. Last month, Mozambican and Rwandan security forces recaptured the port town of Mocimboa da Praia, previously an insurgent stronghold.

But Adesina said insecurity was still restricting investment in other parts of Africa, pointing to conflict zones in Chad, Mali, Burkina Faso, northern Nigeria and Cameroon.

He said the AfDB was developing facilities, including security-indexed investment bonds, to help African countries tackle insecurity and rebuild after unrest.

“Without security, you can’t have investment and you can’t have development,” he said.

Source: Club of mozambique

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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