$450 Million Mozambique LNG Terminal Deal Expected by January

Rompco expects to conclude an agreement by January for a new liquefied natural gas terminal, Engineering News reported.

The gas pipeline company transports South Africa’s only supply of the fuel from Mozambique. A memorandum of understanding signed Thursday with Empresa Nacional de Hidrocarbonetos precedes the formal agreement, Mlandzeni Boyce said in an interview.

ENH didn’t immediately respond to a request for comment. Adding a terminal to bring in LNG will help solve diminishing supply from existing onshore fields.

Those fields feed into the 865 km Rompco pipeline, built to supply Sasol’s chemical and fuel-making operations. South Africa also plans to increase its use of gas to generate power along with other industrial applications.

Valued at $450-million, the initiative entails positioning a floating storage and regasification unit near Inhassoro off the southern coast of Mozambique. It also features a connection to the main Rompco pipe, Boyce said after the signing.

The company is looking to own the spur line, as well as a stake in the FSRU. Startup is anticipated by 2030, and Sasol has said that coal-derived, methane-rich gas from its Secunda facilities can serve as an interim supply until the liquefied natural gas becomes accessible.

That will require FSRU developers to move quickly.

“We aim to conclude the joint-development agreement and sign it by January.”

Boyce told Engineering News.

“Our focus now is trying to develop the feasibility study. Once we conclude that, we then move into the negotiation in terms of what are the opportunities for participation,” Boyce said.

Sasol signed a separate memorandum of understanding with ENH over the FSRU development earlier in the week. Operating out of Johannesburg, the firm holds a 20% interest as operator in Rompco, while state-owned enterprises from South Africa and Mozambique each maintain 40% shares.

According to Boyce, the LNG will be sourced from the local gas quota allocated to Mozambique via ventures spearheaded by firms such as TotalEnergies SE on the country’s northern shore.

Consequently, South African buyers will receive the energy source at an affordable cost lower than international market rates for LNG. Another distinct regasification terminal is being developed near the Mozambican capital by separate groups and will similarly supply the Rompco pipeline.