The South African chemical and synthetic fuels company, Sasol, said last week (Thursday 13) that it will abandon its plans to import Natural Gas through the proposed African Renaissance Pipeline (ARP). The ARP would connect Mozambique and South Africa via a 2600 km pipeline from the Rovuma Basin in Cabo Delgado province. The first phase of the project on the Mozambican side would be completed in 2025 and the second phase would start in 2026 on the South African side.
However, to achieve its purposes, Sasol will opt to import the Mozambican gas that will be produced by the consortium led by Total Energies. The company believes that in this way it will better exploit Mozambique's offshore gas reserves.
For now, the company is considering importing LNG from a permanently moored floating storage regasification unit (FSRU) planned for the Port of Matola in Maputo.
The project developer, Beluluane Gas Company (BGC), a joint venture that includes TotalEnergies, South Africa's Gigajoule natural gas group, and Mozambique's Matola Gas Company (MGC) as partners, completed the first phase of engineering and design studies for the project in mid-2021.
Sasol currently imports gas from its declining Pande and Temane gas fields in Inhambane province via the 865 km Rompco pipeline connecting to MGC's transmission grid. Sasol expects to offset its declining gas volumes when the Matola FSRU comes online in mid-2024.
In an interview with Bloomberg at Sasol's headquarters in Johannesburg, Sasol CEO Fleetwood Grobler said that investment directed at ARP would only "remain functional for 30 to 40 years," pointing to the fact that the company is concerned about the climate impacts of fossil fuel exploration.
"Long-term gas is also a fossil fuel and we have said that we want to get to absolute neutrality," he noted.
"We made the right decision, because gas is finite, and when it is no longer needed you will no longer invest in gas," he stressed.
Sasol, the world's largest producer of synthetic fuel from coal, is South Africa's second largest emitter of Greenhouse Gases (GHGs) after state-owned electricity utility Eskom. Despite this, global carbon watchdogs say that in terms of greenhouse gas production from a single plant, Sasol's synthetic fuel plant is first globally.
Climate Transparency, an organization that tracks the energy transition in the G20, said, that in 2020 South Africa still relied on coal to meet 74% of its energy needs, more than double the average of 31% among the G20 group of industrialized and developing nations.
The climate agency recalled that in September 2021, Sasol announced a plan to reduce its GHG emissions by 30% by 2030, but so far it only gets 10% of the natural gas it will need to replace enough coal to meet that goal.
Sasol's failure to meet the proposed ARP leaves it with two options for sourcing additional gas: LNG imports and developing South Africa's own gas reserves. However, Sasol is also going green, having set up a new business unit, ecoFT, to develop its proprietary Fischer-Tropsch gas-to-liquids technology to better utilize the 2.3 million tons of gray hydrogen the company produces annually.
Source: JPT, Bloomberg.
This text was updated at 14:39 by MZNews.