New gas pipeline between Mozambique and South Africa may cost US$6 billion

10 December 2014

The SACOIL Holdings group will conduct a technical and commercial feasibility study alongside the Mozambican and South African authorities for construction of a gas pipeline linking northern Mozambique to South Africa, said the South African group in a statement.

The project intends to harness the commercial potential of the natural gas reserves discovered in the Rovuma sedimentary basin in the Mozambican province of Cabo Delgado, and involves construction of a 2,600-kilometer costing an estimated US$6 billion.

To perform the technical and commercial feasibility study, SACOIL Holdings established a joint development agreement with Mozambican public institutions National Institute for Management of State Holdings (Igepe) and South Africa’s Public Investment Corporation SOC Limited (PIC), the statement said.

Considering the development of regional economies of countries such as Zimbabwe, Zambia, Malawi and Botswana, the project is aimed mainly supplying energy to South Africa, but also to Mozambique, where there are plans to build facilities to make use of natural gas in several provinces.

Power production at thermal power plants, as well as the supply of gas to industries, domestic consumption and vehicles are some of the objectives that will be evaluated by the feasibility study, which will outline the potential of natural gas as clean energy to reduce carbon emissions and associated environmental effects.

If construction of the project goes ahead this will be the second pipeline linking the two countries as there is already one that links Inhambane province in southern Mozambique, to Komatipoort in South Africa, and which was built by Sasol, the South African group that explores natural gas in Pande and Temane, Mozambique.

Large natural gas reserves have been discovered over the last four years in the Rovuma basin where the Mozambican government estimates there are 200 trillion cubic feet of natural gas. (macauhub/MZ)