South Africa's PetroSA targets Mozambique gas in new sales deal

Sasol

17/04/2024 10:21

By Wendell Roelf
       CAPE TOWN, April 17 (Reuters) - South Africa's PetroSA
expects the first flows of gas into the country from a deal with
Mozambique's national energy company ENH later this year,
officials said, amid efforts to shore up supplies ahead of a
potentially crippling shortage.
    Handed a gas trading licence by regulators in March,
state-owned oil and gas company PetroSA has moved quickly to
secure a deal for an initial 2 petajoules of gas a year (PJ/a),
with scope to rise to 200 petajoules eventually.
    That would be enough to supply scores of industrial gas
users, including steelmaker ArcelorMittal  ACLJ.J , which
currently relies on around 190 PJ/a, mainly supplied by South
African petrochemical firm Sasol.
    Sasol has warned customers that it will significantly
restrict supplies in a couple of years as its Mozambican gas
fields run dry.
    PetroSA wants to form a joint venture (JV) with ENH to woo
potential gas clients in energy-starved South Africa, and
intends replicating the JV model at Mossel Bay to trade gas from
offshore fields discovered by TotalEnergies  TTEF.PA  to the
Cape market.
    "At Mossel Bay we will be looking at potentially two
different JVs, one with Total for Brulpadda (field) and then
another JV is for the Block 9 development, but the main entity
that will trade gas for the group is PetroSA Gas Trading,"
Sesakho Magadla, chief operating officer at PetroSA, told
Reuters.
    The ENH gas sales agreement involves importing gas via the
869 km ROMPCO pipeline that links Pande and Temane fields to
South Africa, before supplying users via Sasol's pipeline
network in the north of the country, she said. ENH did not
respond to requests for comment.
    PetroSA is currently negotiating two gas transportation
agreements with Sasol and ROMPCO - the pipeline company it
operates, a presentation to lawmakers last month showed. The
ROMPCO pipeline flows from Mozambique to Sasol's petrochemical
complex at Secunda where it operates the world's largest
coal-to-liquids plant. 
    "Negotiations are currently ongoing relating to a gas
transportation agreement to provide PetroSA ... access to
uncommitted capacity within the pipeline network," Alex
Anderson, Sasol spokesperson, said.
    Technical studies are also underway to determine the
feasibility of transporting PetroSA’s gas to different locations
in the vicinity of the current pipeline network, he added.

 (Reporting by Wendell Roelf;Editing by Elaine Hardcastle)
 ((wendell.roelf@thomsonreuters.com; +27 21 461 3523;))