MOZAMBIQUE – iGas, the South African gas development company, and Mozambique’s Companhia Mocambiçana de Gasoduto (CMG) have acquired a 30% equity stake in the 865km Republic of Mozambique Pipeline Company (ROMPCO) pipeline.

Sold for R4.1 billion (US$251.06m), plus a deferred payment of R1 billion (US$61.23m) pending specified conditions are met by June 30, 2024, the shares bring iGas and CMG’s total interest in the pipeline to 40%, with Sasol subsidiary, SSA, holding the remaining 20%.

“The transaction will pave the way for the group to lead energy security and a just transition program for South Africa,” Central Energy Fund Group CEO, Ishmael Poolo, said.

Sasol will remain the operator of the pipeline with supply to South Africa remaining unimpeded. Linking gas-rich Mozambique with Sasol’s Secunda operations in South Africa, the 865km pipeline has been instrumental towards supplying South Africa’s economy with energy, and the acquisition is expected to herald a new era of trade between the southern African nations.

For Mozambique, as large-scale gas projects begin to come online including the Coral-Sul floating liquefied natural gas (LNG) facility – which received first gas in June 2022 –, a new era of gas market growth is in sight.

With over 100 trillion cubic feet (tcf) of gas, Mozambique continues to make significant progress towards becoming a competitive gas exporter.

ROMPCO, which has been exporting gas from Mozambique’s Pande and Temane fields since 2004, has not only paved the way for cross-border gas trade but has emphasized the role intra-African trade will have for strengthening energy security across the continent.

Going forward, as other sizeable projects including the TotalEnergies-led 12.8 million tons per annum Mozambique LNG project, the country is set to witness unprecedented socioeconomic growth on the back of revenue generated from gas.

“Africa needs gas, and the Chamber will continue to drive this narrative. In 2022, the energy crisis has only become clearer. Countries including South Africa are at risk of delayed socioeconomic growth due to inconsistent power supply, supply which can be improved through gas,” states NJ Ayuk, Executive Chairman of the AEC.

“With projects in Mozambique coming online and new supply brought on the market, increasing intra-African gas trade will be key for unlocking a new era of industrialization, energy access and socioeconomic growth.

“During the continent’s premier energy event, African Energy Week (AEW) 2022, we will discuss gas, intra-African gas trade and diversification, providing the best platform for deals such as the ROMPCO acquisition to be signed.”

The acquisition comes at a time when South Africa’s power utility, Eskom, has introduced stage six load shedding, driven by coal-fired power plant disruptions. Through the pipeline, South Africa will be able to continue importing much-needed gas, strengthening capacity and stabilizing the grid.

The transaction marks the completion of Sasol’s divestment program, first announced in March 2020, with the company remaining the operator of the pipeline.

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