Energy group Sasol has started drilling the first of 12 new gas and oil wells in Mozambique where the government recently approved a production sharing agreement (PSA), as well as a field development plan for the resources, which are in the same neighbourhood as Sasol’s producing fields at Temane and Pande.
Sasol Exploration and Production International senior VP John Sichinga said $1.4-billion had been approved for the campaign, as well as the further development of the central processing facility (CPF), near Temane, which began operating in 2004.
Besides the wells, Sasol will be adding a fifth gas train, as well as trains to produce liquid petroleum gas for domestic consumption and additional liquid concentrate, which is sold as a high-quality fuel blend and consumed mostly in Asia.
Sichinga says that in anticipation of the PSA, which was approve in January, Sasol made investments of about $50-million in site preparation at the CPF and the drill pads, as well as to secure long-lead items.
Gas sales from the existing petroleum production agreement area are governed by commercial contract that enables Sasol to sell into South Africa until 2029 and into Mozambique until 2034.
Sichinga says the PSA-linked investments are part of a phased growth plan aimed at raising the capacity of the CPF, as well as increasing the volume of gas available for consumption in Mozambique.
Senior investor relations VP Cavin Hill notes that Sasol has made ongoing investments into both the CPF and the pipeline and that, since the initial $1.2-billion investment, it has spent an additional $2-billion on exploration and expansions.
“South African needs to diversify its energy mix to include more gas,” Hill asserts, adding that there are still significant opportunities to “monetise” Mozambique’s gas resources while helping South Africa with it energy diversification aspirations.
