Mozambique to Expand Gas Production
Mozambique to expand gas production
MAPUTO, Oct. 31 (Xinhua) — The South African petrochemical giant Sasol is investing about 250 million U.S. dollars in a project to expand natural gas production capacity at Temane and Pande in the southern Mozambican province of Inhambane, AIM reported on Wednesday.
According to a Sasol representative in Mozambique, Mateus Zimba,this project, which is already under way, will double the current capacity of 122 million gigajoules per year.
Sasol believes that the Inhambane fields contain much more gas than the known reserves. Exploration is under way, to be followed by further drilling. Zimba was confident that a doubling of capacity would be achieved within three years.
This will also involve an increase in processing capacity and placing more compressors on the pipeline that carries the gas fromTemane to the Sasol chemical plants at Secunda in South Africa.
About 95 percent of the gas processed at Temane is piped to South Africa. Sasol pays the Mozambican state much less than the market price of the gas. The price for Sasol’s Inhambane concession is only 67 cents per gigajoule, just a seventh of the world market price of 4.5 dollars a gigajoule.
But the development project is expected to provide the Mozambican state with over 900 million dollars in fees and other rights to be paid by Sasol and other companies that directly or indirectly benefit from the gas.
Meanwhile Mozambique is developing its own domestic gas project,based on natural gas condensate from Pande and Temane, which should lead to a substantial decline in the price of domestic gas,which is currently imported.
The state-owned fuel company Petromoc is in charge of the project, and argues that it is viable and sustainable, since the natural gas processing center at Temane meets all the necessary requirements for the production of domestic gas.
About 2.1 percent of the Temane and Pande fields consist of propane and butane. Current Mozambican demand for LPG is about 14,000 tons a year, and Petromoc believes that much more than this could be produced at a refinery in Temane.
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