- LNG in Maputo: Gigajoule in partnership with Total and MGC looking to build an LNG import terminal in the Matola harbour in Mozambique. The project is far advanced and engineering design is underway. A final investment decision will be made in the next year (video link).
- Harbour ready: Space in the Matola harbour has been identified for the project and minimal dredging would be required in the harbour.
- FSRU fast track: The project looks to take advantage of an existing fleet of floating storage regasification units which will be docked at a new berthing point in the Matola harbour. Gas will initially be supplied into Mozambique but with little additional investment the project could connect to the ROMPCO pipeline and supply gas into South Africa.
- Total is the supplier: At the outset LNG could be sourced from Total’s global portfolio but the development of the Northern Mozambican fields should lower the costs in later years.
- In time to supply Sasol: The timing of the project is fortuitous as it is looking to come onstream close to the time that gas production in the Pande and Temane fields will start to decline. Sasol has not reached any formal agreement with the Matola project on LNG offtake, however.
- A piped gas solution is far off: A pipeline from the North to the South of Mozambique could cost in excess of $6bn. The pipeline needs to carry at least 400PJ of gas (almost 2x the capacity of ROMPCO) to be economically viable. The gas users also indicated that gas in the North would become available in 2035 at the earliest as the first priority at the Rovuma would be the development of two LNG trains.
- Gas costs increasing: At current oil prices, the project should be able to deliver gas into Secunda at a price of $7-8/GJ compared to the current price of $2.23/bbl. Prices increase as oil prices rise. The LNG facility will be able to deliver gas at the same price as piped gas. Sasol currently uses 120MGJ of gas so the incremental cost will be significant.
- Significant gas demand: Gas demand in South Africa is set to increase as Sasol looks at increased usage, industrial demand increases, and potential Eskom coal fired plants are converted to gas. This potentially requires expansion of the ROMPCO pipeline.
- Few options: Other LNG facilities are being considered by Government, including a facility in Richardsbay. The Matola project appears the furthest advanced to bring gas into South Africa however.
- Sasol’s gas prices higher. Sasol is looking to increase its gas consumption from current levels in order to reduce emmisions by 2030. The gas will however come at an increased cost which could have a material impact on profits.
- A replay of the call is here and the accompanying slides are here.
