Tuesday, May 21

PetroSA Secures Gas Deal with Mozambique Amid Supply Concerns

South Africa’s PetroSA is set to receive its first gas flows from Mozambique’s national energy company ENH later this year, following a deal that aims to address potential gas shortages in the country.

The state-owned oil and gas company, PetroSA, was granted a gas trading license in March and has swiftly secured a deal for an initial 2 petajoules of gas a year, with the potential to increase to 200 petajoules eventually.

This gas supply is crucial for South Africa, as it would help to meet the needs of various industrial gas users, including steelmaker ArcelorMittal, which currently relies heavily on gas supplied by South African petrochemical firm Sasol. Sasol has warned its customers of significant supply restrictions in the coming years due to the depletion of its Mozambican gas fields.

PetroSA intends to form a joint venture (JV) with ENH to attract potential gas clients in South Africa. Additionally, PetroSA plans to replicate this JV model at Mossel Bay to trade gas from offshore fields discovered by TotalEnergies to the Cape market.

According to Sesakho Magadla, Chief Operating Officer at PetroSA, the gas sales agreement with ENH involves importing gas via the ROMPCO pipeline, which links the Pande and Temane fields in Mozambique to South Africa. The gas will then be supplied to users in South Africa via Sasol’s pipeline network in the north of the country.

PetroSA is currently negotiating two gas transportation agreements with Sasol and ROMPCO, the pipeline company it operates.

These agreements aim to provide PetroSA with access to uncommitted capacity within the pipeline network. Technical studies are also underway to determine the feasibility of transporting PetroSA’s gas to different locations in the vicinity of the current pipeline network.

The gas supply agreement with Mozambique marks a significant step for PetroSA as it seeks to secure gas supplies for South Africa and address potential shortages.