South Africa's Gigajoule expects to import first LNG cargo at new Mozambique terminal by mid-2025

Magma Silver

03/03/2022 09:00

CAPE TOWN, March 3 (Reuters) - South African energy company
Gigajoule is confident of reaching financial closure by year-end
ahead of construction of its $550 million Matola LNG import
terminal in Mozambique with joint development partner
TotalEnergies  TTEF.PA , the chief executive of the
privately-held firm said on Thursday.
    The liquefied natural gas (LNG) terminal, which also has
Mozambican shareholders, is expected to receive its first
shipments of gas to a permanently moored floating storage and
regasification unit in Matola harbour, close to Mozambique's
capital Maputo, by mid-2025, CEO Jurie Swart said on the
sidelines of a gas conference in Cape Town.
    The Matola terminal could become South Africa's first major
LNG supplier at a time government wants to significantly expand
its domestic gas market but faces a gas supply crunch as onshore
gas fields operated in Mozambique by Sasol  SOLJ.J  start
running dry within a few years.
    Sasol's Tande and Temane fields in southern Mozambique
supply the bulk of South Africa's gas needs via the 865 km
Rompco pipeline. According to domestic industry body IGUA's 2021
annual report, South Africa currently faces a gas supply
shortfall of some 170 petajoules a year.
    "Our realistic case is that construction for the LNG import
facility will start in January next year and first gas is seen
mid-2025," chief executive Swart told Reuters.
    He said Gigajoule, which is also co-developing a 2,000
megawatt gas-to-power plant close to Matola, intends to link the
terminal to the Rompco pipeline to supply gas to South Africa.
    "Financing is not that difficult ... in the commercial
market that we've canvassed for both these projects we think
we've got full subscription from all the major commercial banks
in South Africa and export credit agencies," Swart said.
    Matola is independent from Total's $20 billion LNG
development to the north of Mozambique that was disrupted by
violence caused by insurgents linked to Islamic State, although
the French oil major expects to restart the project this year.
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 (Reporting by Wendell Roelf, Editing by Helen Reid and Kim
Coghill)
 ((wendell.roelf@thomsonreuters.com; +27 21 461 3523;))