By the OGJ Online Staff
HOUSTON, Aug. 13 -- Sasol Ltd. Thursday signed a deal with Mozambique that would govern construction of a $1.2 billion pipeline to move gas from that nation to South Africa.
The two nations and Sasoil also signed a deal governing ownership of the line.
The project consists of a gas field development in Mozambique, a 660 mm pipeline extending 865 km to Secunda in South Africa, the conversion of Sasol's current gas pipeline network, and the supply of gas to Sasol customers in South Africa.
Last October Mozambique, ENH (the national oil company), and Sasol signed a deal to provide access to Temane and Pande gas fields as well as the granting of pipeline rights in Mozambique. Sasol and the two governments are finalizing a shareholder agreement for the pipeline company.
The Sasol board approved funding for the project Sept. 3. Sasoil said it and the Mozambique government were finalizing development plans and various other agreements.
It the project is approved, construction would take 3 years and completion would be in the first half of 2004.
Sasol will enable the project by converting its existing pipeline gas market to natural gas, switching its Sasolburg plants from coal to gas, and taking gas into Secunda to supplement coal-based growth there. Sasol plans to grow its market to 120 million gigajoules/year.
The South African parliament is expected to consider legislation this session regulating natural gas sales.