September 5, 2002

Mozambique Gas Pipeline Advances

A 865 kilometre pipeline - a joint venture between Sasol and the governments of Mozambique and South Africa - will run from the Pande and Temane gas fields in southern Mozambique to neighbouring South Africa. Elmore Marshall, Sasol's project director of natural gas said the pipeline was advancing at an average rate of four kilometres a day. So far, a corridor of 400 kilometres of bush and landmines had been cleared. The former war-ravaged country is one of the world's poorest nation's but thanks to successful macroeconomic reforms, is now one of Africa's fastest growing economies.

The gas project, whose total cost of US$1.2 billion, currently employs some 1 500 people, mainly Mozambicans, and will become the country's single largest contributor to its gross domestic product at 21 percent. "It is bringing significant changes as many local people are being employed. Small scale businesses will mushroom as well as some infrastructures that include roads and health to be constructed will be of vital importance," said Energy Minister Castigo Langa.

Initial production of 120 million gigajoules per year is slated to start in the middle of 2004. Most of the methane-rich will be exported to South Africa where it will replace coal as a feedstock at Sasol's chemicals production facilities in Sasolburg. The plan is to expand production to 180 million gigajoules per year in the next 10 years, ultimately raising it to 240 million giga-joules annually in 15 years time. Gas will supplement coal at the group's synthetic fuels plant in Secunda as well as supply industry. Some gas is slated for domestic electricity generators but a decision is yet to be made by the Mozambican government. Marshall said 125 kilometres of pipe had been placed. Another 375 kilometres of pipe, equivalent to two thirds of the Mozambican side of the line, had arrived at the Maputo harbour. (FINANCIAL GAZETTE)

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