Mozambique's state-owned energy company, Empresa Nacional de Hidrocarbonetos (ENH), is seeking investments from chemicals giant Sasol and pipeline operator ROMPCO for a $250 million infrastructure project to supply gas to South Africa from LNG megaprojects operated by international majors in the deepwater Rovuma Basin.
ENH CEO and Chairman Rudêncio Morais pitched the project in an interview with Reuters during African Energy Week in Cape Town on 19 October, saying that for Mozambique to become East Africa’s “power hub,” it needs its “infrastructure by 2030 or 2031 (to be) in step with Mozambique LNG (TotalEnergies), Rovuma LNG (ExxonMobil), and Coral North FLNG (Eni).”
The project envisions two floating storage and regasification units (FSRUs), one at the Port of Beira in Sofala Province and another at Inhassoro in Inhambane Province, near the South African border and the start of the ROMPCO transit network. The facilities would be located roughly 1,200 to 1,500 km south of the LNG production facilities on the Afungi Peninsula and the offshore gas developments in Areas 1 and 4.
Also proposed is a new 140-km coastal pipeline to transmit regasified LNG, delivered to the FSRUs by tanker, into the ROMPCO network, Morais said.
The Republic of Mozambique Pipeline Investments Company (ROMPCO) is a joint venture between the governments of South Africa and Mozambique and Sasol, established to transport natural gas from the Sasol majority-owned and operated Pande and Temane gas fields to markets in both countries.
Depleting Gas Supply Raises Concerns for Third-Party Users
As the Pande and Temane fields near depletion, gas deliveries to third-party networks supplied by ROMPCO are at risk because Sasol has moved to prioritize feedstock supplies for its chemical facilities at the Secunda industrial complex.
The Industrial Gas Users Association of Southern Africa noted in its 2023 annual report that the Pande and Temane fields “have produced at a plateau since 2015, and as of July 2022, available gas resources are ±433 PJ, or 2.5 years of production at current supply levels,” with an additional ±166 PJ associated with the production sharing agreement.
As a result, “Sasol is not extending any gas supply agreements beyond 2024 because of anticipated declines in available gas resources,” the 2023 report noted.
Sasol later extended the deadline to June 2027. CEO Simon Baloyi told Engineering News in an August 2024 interview that production from infill wells would sustain the supply plateau long enough to finalize plans to import LNG through an FSRU at the Port of Matola, a suburb of Mozambique’s capital Maputo, located near existing ROMPCO infrastructure.
The problem, however, was that Baloyi also warned the roughly 300 industrial customers affected by the pending supply cutoffs that LNG imported from international spot markets would cost end users three to five times more than the subsidized gas currently supplied from Mozambique.
This warning helped stall the Matola project, which had the backing of TotalEnergies and South Africa’s Gigajoule Group but has yet to reach a final investment decision.
ENH Proposes Lower-Cost Supply Alternative
It is here that ENH’s newly proposed alternative comes into focus. The plan, unveiled in Cape Town, was made possible by legislation passed by Mozambique’s Parliament in June that added LNG to requirements mandating that 25% of the country’s oil and gas production be supplied to the domestic market.
Under the proposal, LNG from the Afungi megaprojects would be shuttled by tanker to FSRUs along Mozambique’s southern coast and regasified for delivery into the ROMPCO system. Because the gas would be sourced from Mozambique’s domestic allocation, it could be supplied at prices below those tied to international spot markets.
In a statement responding to the Morais’ comments, Sasol said it would be premature to speculate on the nature or scale of any potential investments as it evaluates alternative gas supplies. ROMPCO did not immediately respond to a request for comment, according to Reuters.
South Africa’s Department of Mineral Resources and Energy is meanwhile promoting the Gas Independent Power Producer Procurement Program, which aims to bring gas-to-power projects online by 2030–2031 to reduce reliance on the country’s aging coal-fired power fleet, according to the South African government news service.
Meanwhile, the Rovuma Basin's three LNG megaprojects have shifted into an active, multi-train construction phase. A fourth project, Coral South FLNG, is already producing, with 100% of its output contracted to BP under a 20-year sale and purchase agreement.
