A $6 billion, 2,600km pipeline to take gas from the Rovuma Basin to South Africa is set to be developed by a consortium including a group of unnamed Mozambican private investors in partnership with South African energy firm Sacoil and led by China Petroleum Pipeline Bureau (CPP), according to an announcement made on Tuesday, 1 March.
The proposed pipeline will take gas produced at the huge offshore gas fields off the coast of the north-eastern Mozambique province of Cabo Delgado, through Mozambique to South Africa. The Mozambique government’s plan is to develop gas processing industries, such as fertilizer production and power generation, at major towns and cities along the route. It will also supply gas to South Africa and other neighbouring countries.
CPP will carry out the requisite pre-investment studies, Sacoil said, and finance them up to the bankable feasibility stage. CPP will also be responsible for procuring debt financing equal to 70% of the total project cost, or $4.2 billion, from Chinese financial institutions.
Today’s announcement, made by Johannesburg-listed Sacoil, follows an announcement in December 2014 that Sacoil would conduct a feasibility study into the pipeline project, under a joint development agreement (JDA) it entered into with South African state investment firm PIC, and Mozambique’s state asset management body, IGEPE.
The co-operation agreement announced today supersedes the JDA and leads to the incorporation and operation of the Joint Venture Project Development Company, which will have Chinese, Mozambican and South African consortiums of investors as shareholders. The South African Consortium will include SacOil and PIC.
CPP is a subsidiary of China National Petroleum Company (CNPC), a shareholder in the Eni-led Area 4 project offshore northern Mozambique, which last week received government approval to move ahead with its floating gas liquefaction project. The Area 4 consortium is also expected to join the Anadarko-led Area 1 consortium in building onshore liquefaction units near Palma on the coast of Cabo Delgado province.
Mozambican interests are represented in the consortium by state oil and gas company ENH, which replaces IGEPE on the project, and by a company called Profin Consulting SA. Profin was established in July 2015 as a ‘Sociedade Anonima’, meaning the identities of its shareholders do not have to be made public. It said at the time of its establishment that its aims include developing and financing infrastructure projects, and the commercialisation and transport of gas.
According to Sacoil’s announcement today, Profin signed a Memorandum of Understanding with ENH in October 2015 “with regards to participating as a joint venture partner in the integrated natural gas projects, subject to technical feasibility and commercial viability”.
source: zitamar news
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