Sasol to sell 30% stake in Mozambique gas pipeline

Sasol has signed an agreement to sell a 30% stake in Mozambique gas pipeline to a Reatile-led consortium for $353m (ZAR5bn).

The 865km-long gas transmission pipeline, which is owned by the Republic of Mozambique Pipeline Company (ROMPCO), transports gas from Mozambique to South Africa.

ROMPCO is joint venture of Sasol’s major subsidiary Sasol South Africa (SSA) (50%), Companhia Mocambiçana de Gasoduto (CMG) (25%), and South African Gas Development Company (SOC) (iGas) (25%).

Under the deal terms, the stake in ROMPCO will be divested to an acquisition vehicle owned by the Reatile consortium.

The consortium comprises Reatile Group Proprietary and the IDEAS Fund, managed by African Infrastructure Investment Managers Proprietary.

Upon completion of the deal, SSA will continue to operate and maintain the pipeline. It will retain a 20% stake in the pipeline.

Sasol group CFO Paul Victor said: “The Sale Shares will, subject to certain adjustments, be sold for a consideration comprising an initial amount of R4,145 billion and a deferred payment of up to R1 billion payable if certain agreed milestones are achieved by 30 June 2024.”

Sasol said that the sale is part of its divestment programme to reduce its debt.

The proposed transaction is subject to the waiver or exercise of pre-emptive rights held by CMG and iGas.

It is also subject to competition and anti-trust approvals in the relevant jurisdictions as well as all required consents of third parties including governmental authorities.

Sasol said in a statement: “Sasol’s agreements with ROMPCO to transport gas to Secunda are unaffected and the tariffs remain as per the said agreements, which were approved by the National Energy Regulator of South Africa (NERSA).”