South Africa to approve natural gas agreement with Mozambique

Sep 12, 2001 02:00 AM

South Africa will approve a 10 bn rand ($ 1 = ZAR 8.6000) cross-border natural gas agreement with Mozambique. The long-awaited deal, which should see gas flowing from Mozambique to South Africa by 2004, is expected to be signed Sept. 19.
Energy minister Phumzile Mlambo-Ngcuka said the project will involve the building of an 865 km pipeline. Mlambo-Ngcuka said South Africa's cabinet will meet to sign the agreement. Mozambique's energy minister Castigo Langa said his government still needs to give its final approval, but this would take "no more than a month." Sasol (SASOY), South Africa's oil and chemicals giant, is the main developer of the project.

Sasol director, Patrick Davies, said the company will commit more than ZAR 10 bn to the project, according to the SAPA report. The company has a financing plan which will "accommodate" the project from Sasol's balance sheet. "The project has been built into our cash flow projections and gearing ratios for the future," said Davies.
South Africa's trade minister, Alec Irwin, said the project "opens up exciting opportunities" for the South African and Mozambican economies over the next decade.

Source: Dow Jones via Energy24
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