The Government of Mozambique on Friday announced the approval by Sasol of the final investment decision (FID) for the Production Sharing Agreement (PSA) development of the Inhassoro, Temane and Temane-East fields in the north of Inhambane province.
The Ministry of Mineral Resources and Energy (MIREME) press release values the investment approved for the project, to be executed by Sasol Mozambique Limitada and partners, at around US$755 million.
“The development phase is expected to start in July 2021, subject to the financial closing of the Temane Thermal Power Plant (CTT) project, with approval of the Monetization Agreements and Commercial Facilitation Agreements currently underway,” the communique reveals.
Last year, the Council of Ministers approved the amendment to Sasol’s development plan for the Inhassoro, Temane and Temane-Este deposits in the Production Sharing Agreement (PSA), through Resolution of the Council of Ministers no. 3/2020 of 29 September.
“The contract aims at the integrated development of 23 P/A of natural gas destined for power generation, through the CTT project, the production of 4,000 barrels per day (during the peak) of light oil for export, and implementation of the LPG project of 30,000 tons/year of LPG (cooking gas) for the national market,” MIREME says in the statement.
Also according to MIREME, the project, which is part of the Government’s 2020-2024 Five-Year Plan, is crucial for Mozambique’s economic development.
“It foresees the construction of a new light oil and gas processing unit to process the quantities indicated above, in addition to creating about 3,000 jobs by 2024,” MIRENE adds.
Sasol, writes, in a statement released today: “Importantly, this project will entail Mozambique in-country monetisation of gas through a 450 megawatt gas-fired power plant and a liquefied petroleum gas (LPG) facility in the same time frame. The balance of the gas produced will be exported to South Africa to sustain our operations.”
Sasol last year also started a process to sell its 50% share in the 865-kilometer (538-mile) Republic of Mozambique Pipeline Investment Co. natural gas pipeline, which remains “well underway.”
According to the company’s communique, the Mozambique “PSA development underpins Sasol’s gas transformation strategy by securing additional gas supply from southern Mozambique into Sasol’s gas value chain starting 2024, and serves as a cornerstone in addressing Sasol’s sustainability agenda.”