Mozambique-South Africa LNG terminal deal seen by January

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The $450m project includes a floating storage and re-gasification unit to be anchored off Mozambique’s southern coastline near Inhassoro, and a connection to the main Rompco pipe, Boyce said after the signing.

Rompco, a gas pipeline company that transports South Africa’s only supply of the fuel from Mozambique, expects to conclude an agreement by January for a new liquefied natural gas terminal, its chief executive officer said.

A memorandum of understanding signed Thursday with Empresa Nacional de Hidrocarbonetos, the southeast African nation’s state oil company, precedes the formal agreement, Mlandzeni Boyce said in an interview. ENH didn’t immediately respond to a request for comment.

Adding a terminal to bring in LNG will help solve diminishing supply from existing onshore fields that feed into the 865-kilometer (537-mile) Rompco pipeline, built to supply Sasol’s chemical and fuel-making operations. South Africa also has plans to increase its use of gas to generate power along with other industrial applications.

The $450 million project includes a floating storage and re-gasification unit to be anchored off Mozambique’s southern coastline near Inhassoro, and a connection to the main Rompco pipe, Boyce said after the signing. The company is looking to own the spur line, as well as a stake in the FSRU.

While commissioning is expected from 2030, Sasol has said methane-rich gas produced from coal at its Secunda operations could provide a bridge until the LNG supply becomes available. That will require FSRU developers to move quickly.

“We aim to to to conclude the joint-development agreement and sign it by January,” Boyce said. “Our focus now is trying to develop the feasibility study. Once that we conclude that, we then move into the negotiation in terms of what are the opportunities for participation.”

Sasol signed a separate memorandum of understanding with ENH over the FSRU development earlier in the week. The Johannesburg-based company owns a 20% operator stake in Rompco, with Mozambican and South African state-owned companies each holding 40%.

The LNG will come from Mozambique’s domestic gas allocation from projects developed by companies including TotalEnergies SE on its…

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