Sasol Ltd. is currently increasing output of a fuel that could change Mozambique, at the Temane and Pande gas fields, Bloomberg reports.
Massive gas finds has the possibility of increasing the country’s economy.
“We’re going to incrementally increase capacity until we’ve reached the limit,” John Sichinga, senior vice president of Sasol’s exploration and production unit said.
As Sasol plans to use $1.4 billion to produce more gas to transport via an 865-kilometer pipeline to South Africa’s, Mozambique’s goal to become the world’s third-largest exporter of liquefied natural gas is subject to investment decisions by Eni SpA and Anadarko Petroleum Corp.
“The uncertainty in country does create a challenge on the way forward. The project is pivotal for the development and growth of Mozambique,” Chris Bredenhann, a partner at PricewaterhouseCoopers in Cape Town commented.
Anadarko and Eni are still contemplating whether to forge ahead with projects anticipated to attract $100 billion worth of investment. The approval of project can result in LNG production increasing the economy nine times by 2035.
Following the government’s disclosure in April of $1.4 billion previously hidden debt, the World Bank and other donors postponed their aid and Fitch Ratings downgraded Mozambique’s credit in May.
Both Eni and Anadarko will miss their initial 2018 deadline to commence the shipment of LNG, after deferrals in taking an investment decision.
According to a 2014 analysis by Standard Bank, incomes to be generated for Mozambique could amount to $212 billion from Anadarko’s Area 1 alone, which is based on the extraction of 45 tcf of LNG.
The International Monetary Fund (IMF) has also revealed that LNG production could prompt growth in the Mozambique’s economy to 24% from 2021 to 2025.
“If you look at our demand, we need a lot more exploration prospects. This is our heartland,” Sichinga, said.
He added that Sasol is planning to extend its current commercial agreement in the country past 2029 as the company does not expect the country’s debt issues to reduce investor interest. The company is also considering offerings in Mozambique’s sixth licensing round in 2017.
Anita Fatunji