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africa|coal|energy|gas|industrial|oil-and-gas

PetroSA targets Mozambique gas in new sales deal

PetroSA's Mossel Bay plant

PetroSA's Mossel Bay plant

Photo by Creamer Media

17th April 2024

By: Reuters

  

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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, 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 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.

Edited by Reuters

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