South Africa’s SacOil signs agreement to study $6bn gas pipeline project

SacOil has signed a joint development agreement with the Public Investment Corporation SOC and the Instituto de Gestão das Participações do Estado (IGEPE) to study a possible $6bn gas pipeline between South Africa and Mozambique.

If possible, the transnational terrestrial gas pipeline and distribution facility will carry natural gas from Mozambique’s Rovuma fields into South Africa and other African nations.

The proposed 2,600km main pipeline from northern Mozambique to South Africa will supply gas to key towns and settlements in all Mozambique provinces.

Under the JDA, the partners will work together to evaluate the viability of the project.

The feasibility studies will cover engineering, market development, gas purchasing, economic, financial, technical and commercial risk profiles as well as environmental, social and regulatory issues.

The partners are currently establishing a technical working group (TWG) to start pre-feasibility studies.

SacOil CEO Thabo Kgogo said: "The Mozambique gas project is key for the economic transformation of Southern Africa. Our participation is in line with SacOil’s long term strategy of being a leading Pan African oil and gas company."

The demand for natural gas is anticipated to increase in Botswana, Malawi, Mozambique, Zambia and Zimbabwe.

The gas market in South Africa is driven by demand from the Saldanha Industrial Development Zone and several other facilities which could be converted to gas.