Out-Law News 2 min. read
10 Jul 2014, 9:59 am
Sasol and its partners Empresa Nacional de Hidrocarbonetos (ENH, Mozambique’s national oil company) and Italian energy group Eni will assess the viability and benefits of what would be the first such plant in the country.
Eni is the operator of the so-called ‘Area 4’ block in the deep waters of the Rovuma Basin, which Sasol said is estimated to hold up to 85 trillion cubic feet of gas.
Sasol chief executive officer David Constable said: “The proposed GTL facility firmly aligns with Mozambique’s gas master plan goals, and, if successful, will go some way to accelerate socio-economic development in the country and the broader region.”
Constable said: “Our GTL aspirations highlight our commitment to partnering with the Mozambican government and Eni in the responsible development of the country’s natural resources.”
Eni has an indirect 50% participating interest in Area 4, owned by Eni East Africa, which holds 70% of Area 4. The other partners are Portuguese corporation Galp Energia (10%), the Korea Gas Corporation (KOGAS, 10%) and ENH (10%, exploration phase only). In Area 4, the China National Petroleum Corporation holds an indirect stake of 20% through Eni East Africa.
In May 2014, Eni announced the drilling of the Agulha 2 well, the 12th well to be successfully drilled in Area 4, and which the group said “proved about 25 metres of gas column in good quality Palaeocene reservoir sandstones and confirmed the southern extension of the field”.
Mozambique’s gas master plan was developed in 2012 (76-page / 1.78 MB PDF) by the World Bank’s International Finance Corporation. The master plan said: “Power generation can play an important role in Mozambique’s industrialisation, and as such it is critical to conduct an integrated analysis of the power sector not only in Mozambique, but of the entire Southern African Power Pool. The entire energy mix for power generation needs to be evaluated to identify the role of gas-based power in Mozambique for local use and export.”
In April 2014, a report published by the UK-based Oxford Institute for Energy Studies (62-page / 3.18 MB PDF) said gas finds in the Rovuma Basin “could represent an economic game changer for one of the world’s least developed countries”.
The report said: “Amid such ambitious plans and schedules, 2014-15 will be a crucial decision-making period for developers looking to race ahead of other East African ventures, such as those in Tanzania, if they are to succeed in bringing liquefied natural gas production online by the end of the decade and to finalise long-term contracts with, primarily, Asian buyers before the global price outlook changes.”
Mozambique has been among “star performer” countries for attracting foreign direct investment (FDI) in sub-Saharan Africa in recent years, according to Ernst & Young’s (EY) third ‘Africa Attractiveness Survey’ published in 2013. EY said FDI projects into the region grew at a compound rate of 22% from 2007.
