Mozambique: Total and Gigajoule sign gas import agreement
The French oil and gas company Total, and the South African Gigajoules group, signed an agreement in Maputo on Wednesday for the import of the liquefied natural gas (LNG) that will be needed for a major gas-fired power station planned for Beluluane, on the outskirts of the Mozambican capital.
There is heavy irony in the agreement, because Mozambique has the largest natural gas reserves in southern Africa - but Mozambique's own LNG factories are still several years away from the start of production.
Speaking to reporters after the ceremony, the Chief Executive Office of the Matola Gas Company (MGC), Bruno Morgado, said the major benefit from the agreement will be "greater availability of gas, because the fields at Pande and Temane (in Inhambane province) will begin to decline in a more or less rapid manner".
It is the Pande and Temane gas which is currently being exploited by the South African petrochemical giant Sasol. Most of the gas extracted by Sasol is sent by pipeline to its own chemical plants in the South African city of Secunda. But some is diverted to industries in Matola, and to gas-fired power stations in the southern region.
Morgado thought there will be a gap of seven or eight years before LNG from the Rovuma Basin will be fully available, "and in that period, it must be guaranteed that Mozambican industry has gas so that it can continue to develop".
A further benefit from importing LNG will be the take-off of the Beleluane thermal power station. "This is a large scale project that will generate up to 2,000 megawatts of power. There wasn't enough gas for this", Morgado said.
The agreement was signed by the Chairperson of Gigajoule, Johan de Vos, and the representative of Total in Africa, Philip Olivier.
The project envisages a floating unit, anchored permanently in the port of Matola that will store and regasify the LNG. A start will be made on installing this unit in June 2020. It should be completed in 16 months.
A pipeline will run from Matola port to the planned new power station in Beluluane, using the MGC's existing infrastructure.
The investment will be more than 2.5 billion dollars, and the project will supply power to Botswana and Eswatini, as well as to Mozambique and South Africa. Mozambique would become hub, selling gas on to island countries such as Madagascar and Mauritius.
As for where the LNG will come from, Morgado said "The origin is not specific, but it will come from Total's international portfolio. The great advantage of working with Total as a shareholder and partner is that we shall manage to guarantee price stability".