30-11-01 The economy of Mozambique is about to be transformed by gas that will be transported to South Africa to be converted into synthetic fuel. It will also power steel furnaces and be used in many products like lipstick, detergents, carpets and light bulbs.
Sasol is pioneering the project to extract and propel natural gas along 870 km of pipeline to Secunda, where it will be fed into Sasol's existing gas network. The gas will also be used at Sasolburg, where it will replace coal as a feedstock for an array of synthetic fuel and chemical processes. It will also be used for expansion at Sasol's Secunda plant, and will be used to provide electricity and steam to industrial clusters.
A conference on the natural gas project, which was organised by Sasol, was told that those involved in the pipeline plan would face hazards including malaria, land mines, the threat of floods, and the logistical nightmare of transporting the lengths of pipes to be laid in remote areas of Mozambique.

No wonder Sasol managers have been in touch with the contractors who built the Mozal aluminium smelter, also in Mozambique, to pick up a few pointers. The pipeline is being developed as a joint venture with the governments of Mozambique and South Africa.
PLJ financial services economist Dawie Roodt said the two governments would together rake in $ 24,6 bn during the life of the project, compared with the $ 18,3 bn the project sponsors would receive. The pipeline project could add 20 % to Mozambique's gross domestic product, and it will give South Africa's eastern neighbour cheap energy that may be used by industrial projects, including Mozal and Mozal II.
However, a big question mark now hangs over one of the main potential Mozambican customers for natural gas, the $ 1,1 bn Maputo Iron and Steel Plant, which was to be developed by US energy company Enron. Enron is in deep trouble, and it will not be easy if needed, to recruit another sponsor for the Maputo project. Enron's earlier exit from natural gas exploration activity in Mozambique has left a gap Sasol wants to fill.

The manager of Sasol's gas field development, Larry Williams, said at the conference that the hunt was on for international partners to join Sasol in further exploration activities in Mozambique, with a stake of up to 50 % in the exploration of some gas fields on offer. An international partner was being sought to take a 50 % stake in the central production facility intended to dry out, chill and compress the natural gas before it goes into the pipeline.
Meanwhile, the crisis affecting steel producers worldwide has cast further doubt on the future of the Maputo project, which would produce steel slabs for export. The Mozambique government has been seeking urgent clarification from Enron.
Whatever happens in Maputo, though, the pipeline will go ahead, and this is just one project in what could be a major development for natural gas in South Africa. Rod Crompton, the government official in charge of hydrocarbons, said at the conference there was a possibility of a natural gas pipeline being constructed from the Mossgas facility in Mossel Bay to Coega. This would enable the development of gas-based industries, such as production of ceramic parts for use in catalytic converters, in the Coega industrial development zone.

"It's an idea and a possibility," said Crompton. He said he expected to see the day when a natural gas grid would cross South Africa, linking the pipeline from Mozambique to the envisaged Cape west coast natural gas pipeline, which could stretch from Namibia to Cape Town, feeding a power station in that city, and then along to Mossel Bay. Natural gas is a growth industry, as UK consultant John Hawkshaw, who is a former head of BP's gas operations, said at the conference.
Hawkshaw said natural gas which is less of a pollutant than either oil or coal had shown the greatest growth of any primary energy source. "By and large, it has grown at more than twice the growth rate for oil," he said.
Hawkshaw said that as the focus onthe environment intensified, the conversion of cars either to gas or to a combination of liquid fuel and gas could create huge demand. Just as the pipeline project may help to transform the economy of Mozambique, significant supplies of natural gas arriving in South Africa could help it to transform its energy sector. Just as the pipeline project may help to transform the economy of Mozambique, significant supplies of natural gas arriving in South Africa could help it to transform its energy sector.