The gas agreement is part of the production-sharing agreement (PSA). Sasol and Empresa Nacional de Hidrocarbonetos (ENH) will act as the sellers with gas going to Electricidade de Moçambique (EDM) for the Temane power plant.
The PSA will provide 23 PJ per year of gas to the Central Termica de Temane (CTT) power project.
Sasol will also supply 30,000 tonnes per year of LPG to ENH. The state-owned ENH will sell the product to the market, accounting for 75% of demand.
The PSA will also produce 4,000 barrels per day of light oil, which Sasol will export. The company expects to start work on the PSA project this month.
“The start date for gas production is in line with CTT’s commissioning date in 2023, and the production of LPG and light oil in 2024,” said Sasol president and CEO Fleetwood Grobler.
“The signing of the Gas Supply Agreements and the LPG Sale Agreement therefore underpins Sasol’s gas transformation strategy and also serves as a ratification to extend our plateau production from the existing licence to help drive forward the Mozambican economy.”
The deal provides an opportunity to “harmonise private sector expertise with public sector objectives”, Grobler said. “It is moments like these that fill me with hope that, together, we can realise a brighter future for all.”
Mozambique President Filipe Nyusi participated in the signing ceremony. The gas from Sasol is “fundamental in finding a solution that would make the [power] project viable”, he said.
Nyusi went on to say the Temane projects should prioritise Mozambicans. They would reduce imports and the cooking gas and electricity deficit, he said.
The gas supply deal allow work on the CTT plan to begin. This covers the 400 kV transmission line and the 450 MW power plant itself.
The World Bank, Norway, African Development Bank (AfDB), Islamic Development Bank (IDB), IFC, DFC and OFID are all supporting the CTT project.
EDM said this marked the opening of a new phase in the energy sector. The company is leading in the generation of cleaner electricity, it said, helping promote industrialisation and exports.