South Africa's SacOil Signs Joint Development Agreement for Southern African Gas Pipeline

South African energy firm SacOil, Public Investment Corporation SOC Limited (PIC) and The Instituto de Gestão das Participações do Estado (IGEPE) have agreed to study feasibility of a $6 billion transnational terrestrial gas pipeline and distribution facility that will carry natural gas from Mozambique’s Rovuma fields into South Africa, with off-takes to other neighbouring Southern African Development Community (SADC) countries.

As per the Joint Development Agreement (JDA) whose effective date is 03 December 2014, the feasibility studies will cover engineering, market development, gas purchasing, economic, financial, technical and commercial risk profiles as well as environmental, social and regulatory issues, SocOil said on Monday.

The JDA partners are currently setting up a technical working group to commence pre-feasibility studies.

If constructed, it is proposed that the 2,600km main pipeline from northern Mozambique to South Africa will, en route, deliver gas to key towns and settlements in all provinces of Mozambique, thereby stimulating industrial growth in the country, SocOil stated. The company added that the indicative gas requirements of, as well as benefits to, Mozambique and South Africa appear to justify such a pipeline. 

SacOil’s CEO Thabo Kgogo said, "The Mozambique gas project is key for the economic transformation of Southern Africa. Our participation is in line with SacOil’s long term strategy of being a leading Pan African oil and gas company.”

IGEPE is an agency of the government of Mozambique established by law to manage investment portfolios and shares in commercial ventures. The PIC is an investment management company and the largest fund manager on the African continent, established by an Act of Parliament and wholly owned by the South African government.