Multi-Billion-Dollar Gas Pipeline In Development To Link South Africa With Mozambique

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South African-based independent oil and gas company SACOIL Holdings is set to construct a 2,600 km long gas pipeline worth $6 billion. The pipeline will link the South African gas fields with that of Mozambique, fostering a growing regional integration.

“The project intends to harness the commercial potential of the natural gas reserves discovered in the Rovuma sedimentary basin in the
Mozambican province of Cabo Delgado, and involves construction of a 2,600km pipeline costing an estimated $6 billion,”said SACOIL Holdings in a statement.

SACOIL Holdings said it has established a joint development agreement with Mozambican public institutions; National Institute for Management of State Holdings (Igepe) and South Africa’s Public Investment Corporation SOC Limited (PIC). They wil perform the technical and commercial feasibility study for the project.

“Power production at thermal power plants, as well as the supply of gas to industries, domestic consumption and vehicles are some of the objectives that will be evaluated by the feasibility study, which will outline the potential of natural gas as clean energy to reduce carbon emissions and associated environmental effects,” the group added in the statement.

An Oil and Gas Journal released in January this year raised Mozambique’s proved natural gas reserves to 100 trillion cubic feet (Tcf), up from 4.5 Tcf the previous year, placing the country as the third-largest proved natural gas reserve holder in Africa, after Nigeria and Algeria.

According to the International Monetary Fund (IMF), coal and natural gas production could potentially increase Mozambique’s economic growth rate by two percentage points annually over the next decade.

Source: George Mpofu at ventures-africa.com

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