GAS MONETISATION Providing the basis for a strong and sustainable economy Elfranco van Loggerenberg Sasol Senior Vice President: Business Development & Portfolio Management
Disclaimer: forward-looking statements Forward-looking statements: Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements include, but are not limited to, statements regarding exchange rate fluctuations, volume growth, increases in market share, total shareholder return and cost reductions. Words such as believe, anticipate, expect, intend, seek, will, plan, could, may, endeavour and project and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forwardlooking statements. These factors are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 29 September 2014 and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. A new era for Sasol 2
We are a global company with African roots Sasol is an international integrated energy and chemicals company that leverages the talent and expertise of our more than 33 000 people working in 37 countries. We develop and commercialise technologies, and build and operate world-scale facilities to produce a range of high-value product streams, including liquid fuels, chemicals and low-carbon electricity. Central Processing Facility, Mozambique A new era for Sasol 3
Ten years ago, through strong in-country partnerships, we pioneered gas monetisation in Southern Africa Developed stranded gas fields in Mozambique through collaborative partnerships Together with our Mozambique partners, Sasol contributed to the creation of a favourable and safe investment climate and the establishment of the Exploration and Production sector in the country Gas development with our partners has been a catalyst for socio-economic growth through: Revenue generated from equity investment in the natural gas project Tax revenue (one of the largest tax payers in Mozambique) Capital investments and spin-offs from secondary industries A new era for Sasol 4
Strategic partnerships are key to creating a successful business Partners in the Central Processing Facility (CPF) Sasol 70% (Operator), Moçambicana de Hidrocarbonetos S.A. (CMH) 25%, International Finance Corporation (IFC) 5% PeSS - joint venture between Sasol (49%) & Petromoc (51%) PeSS supplies liquid fuel and lubricant products to the mining, road haulage, construction and agricultural segments throughout Mozambique Equity in pipeline company (ROMPCO) Sasol 50% (Operator), Companhia Moçambicana de Gasoduto (CMG) (25%), igas (25%) Empresa Nacional de Hidrocarbonetos (ENH) signed an agreement for a natural gas reticulation project Central Térmica Ressano Garcia (CTRG): joint venture for power generation at Ressano Garcia: Electricidade de Moçambique (EDM) (51%) & Sasol (49%) A new era for Sasol 5
Natural gas fields Sasol provided an anchor offtake to facilitate the development of gas fields in Mozambique Pande Mozambique Royalty gas to ENH: Vilanculos ENH Maputo Reticulation Royalty gas >300% Growth consumption 2012: 4 MGJ/a 2004: <1MGJ/a South Africa Sasol Secunda Central Processing Facility* Ressano Garcia Rompco Pipeline **Sasol Sasol Sasolburg Temane 2012: 183 MGJ/a* 2004: 120 MGJ/a Central Térmica Ressano Garcia 175 MW 3 rd parties 3rd parties *43% of expansion capacity (27 MGJ/a) allocated to Mozambican commercial markets *14% of expansion capacity allocated to royalty gas markets, i.e. 9MGJ/a **43% of expansion capacity (27MGJ/a) allocated to markets in South Africa A new era for Sasol 6
Continuing to grow our existing operations Investing in growing capacity beyond our 183 MGJ/a current capacity Looking for opportunities for additional production from our existing producing licence Low and high pressure compression, and electrical expansion projects aimed at enhancing reservoir deliverability Additional capacity through debottlenecking and expansion of the Central Processing Facility (CPF) will take us to 240 MGJ/a Central Processing Facility, Mozambique A new era for Sasol 7
ROMPCO an example of a successful cross border public private partnership US$140 million pipeline completed in 2010 Over US$200 million investment to increase pipeline capacity to support market development in Mozambique and South Africa Central Processing Facility, Mozambique A new era for Sasol 8
Ongoing investment has enabled growth in both Mozambican and South African gas markets ROYALTY GAS To date, gas taken in kind has grown by 33% (compound annual growth rate) driven by significant growth in the Mozambique market Sasolburg Gas Engine Power Plant First permanent gas-to-power plant in South Africa 175 MW capacity 5% gas royalty entitlement analysis - GJ FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 FY05 3.8 3.5 3.8 3.4 3.2 2.9 1.8 1.4 1.3 3.5 Natural gas in kind 4.5 3.9 2.6 2.9 2.1 2.4 3.6 3.5 3.4 Natural gas in cash GJ (millions) Central Térmica Ressano Garcia (CTRG) Gas Engine Power Plant First permanent gas-topower plant in Mozambique Joint venture with Electricidade de Moçambique (EDM) (51%) and Sasol (49%) Meeting 23% of incountry demand 175 MW capacity Enabling energy security, reducing GHG emissions A new era for Sasol 9
The Rovuma discoveries hold significant promise for Mozambique and the East and Southern African region. Mozambique has raised projections for the amount of natural gas contained in the Rovuma Basin from 170-200 tcf Natural gas discoveries in Mozambique are some of the largest finds in the world in the past five years, comprising 40% of new gas discoveries in 2012 9 tcf could result in 100 000 bbls/day of GTL products, of which 75 000 bbl/day could be diesel which has the potential to displace all imports* and create export opportunities in the region 9,5 tcf of this gas could result in the generation of approximately 6,3 GW** of electricity in a region that requires electricity generation capacity *Source Ministry of Energy : 900 000 kilo litres of diesel was consumed in 2012 (~16 000 bbls/day ) an estimate based on information from an industrial insider - EUROSIS data **The 2010 version of the South African Integrated Resource Plan indicates a total of 6,3 GW of new capacity to be generated from natural gas by 2030 A new era for Sasol 10
Enhancing the benefits of in-country monetisation LNG opens up export opportunities, but in-country monetisation is also needed to enable socioeconomic development expectations are that this will happen in parallel Sasol is an ideal partner for this because: We are an African-based company confident about the future of our continent We have been successful at working with national companies and governments to realise their key strategic drivers We have an established presence in Southern Africa regional markets that can easily be extended into the rest of Africa We have competitive proprietary gas monetisation technologies which we have successfully implemented in other countries Inhassoro, Mozambique A new era for Sasol 11
We have proven, global expertise in gas monetisation Canada GTL ~48,000 bbl/d Feasibility phase Uzbekistan GTL ~38,000 bbl/d FEED phase Lake Charles GTL ~96,000 bbl/d FEED phase ORYX GTL ~32,400 bbl/d Consistently operating above design capacity since 2007 Mozambique: Conducting a pre-feasibility study with ENH and Eni for a GTL plant using gas from the Rovuma basin Escravos GTL ~33,200 bbl/d Ramping up to full capacity Secunda CTL ~160 000 bbl/d Gas turbines generating electricity at ~200 MW. Central Térmica Ressano Garcia Gas Engine power plant 175 MW Sasolburg Chemical production using gas and Gas Engine Power plant 175 MW A new era for Sasol 12
!!!!! 22 0'0"S 22 0'0"S 21 45'0"S 21 45'0"S 21 30'0"S 21 30'0"S 21 15'0"S 21 15'0"S Committed to further development in Mozambique 34 30'0"E 34 45'0"E 35 0'0"E 35 15'0"E 35 30'0"E The PSA licence is adjacent to the current producing PPA area: Separated from the initial commercial discoveries to enable initial development of the 120 MGJ/a project Field development plan in progress on track for submission in February 2015 N Pande Main Corvo Tafula!!!!!!!!! Pande G-10 Temane East!!!!!!!!!!!!!! CPF Inhassoro Inhassoro G-6 Inhassoro G-10 G-6 Oil Rim!!! Pipelines Roads Towns_CPF PSA PPA An Extended Well Test was conducted on the Inhassoro oil rim produced over 236 000 bbls of light oil as part of the appraisal programme Notice of commerciality declared in early 2013 for both natural gas and oil!!!!!!!!!!!!!!!!! 0 5 10 20 30 40 50 34 30'0"E Subject to approval by authorities, the PSA provides significant value adding opportunities:!!!!!!!!!!!!!!!!!!!!!!!!!! Kilometers Diversification of Mozambique s energy portfolio and advancement of in-country monetisation options Enablement of extensive skills development and local content opportunities A new era for Sasol 13 34 45'0"E!!!!!!!!!!!!!!!!!!!!! Temane Main Temane G-8 35 0'0"E 35 15'0"E Inhassoro G-10 Vilanculos 35 30'0"E
And ongoing exploration Area A: entered Second Licence Period to drill Grudja amplitude supported anomaly in a relatively unexplored part of the Mozambique basin Concluding a farm out of 40% interest Looking at upcoming bid round blocks with interest Grudja G-6 A new era for Sasol 14
Facilitating shared value in Mozambique Targeted skills development of Mozambican nationals to sustain the oil and gas industry at various levels Advance the bursary and learnership programme as well as university collaboration Local content policy stipulates local ownership, but also local employment and purchase of local materials Preferential procurement giving preference to Mozambican businesses wherever possible without compromising on safety and quality standards Clara José, student at Mabote Technical and Vocational School, Mozambique Dedicated focus on driving localisation and allocation of Mozambican nationals to various levels Central Processing Facility is led by a Mozambican national and the maintenance department is being run by 100% Mozambicans To enhance our employee value proposition, we are currently building a housing village in Vilanculos to accommodate CPF employees and their families A new era for Sasol 15
Diversifying energy sources Enabling access to cleaner energy Sasol and its partners are developing a 20 000 tpa LPG facility which will: Improve balance of payments Reduce LPG imports Stimulate growth amongst distributors and retailers LPG is a portable, clean and efficient energy source Enable accessibility and affordability to communities Reduce pressure on forests charcoal currently a primary energy source Household using natural gas for cooking Gas reticulation systems Sasol partnered with ENH on installation of gas reticulation systems in Vilanculos, Inhassoro & Govuro in Inhambane province Advancing the use of gas as a source of household electricity Over 300 families have benefited over the last three years A new era for Sasol 16
Looking ahead to the next decade Partner for success Operations Commitment to community development Pursue exploration activities Optimise current assets Explore additional opportunities to monetise natural gas in Mozambique Explore for partnership opportunities to leverage Sasol s gas monetisation technology Build local skills and supplier capacity Pursue sustainable relations with community stakeholders Continue to align our activities with government drivers, e.g. education, health, energy security and food security CTRG gas to power plant, Mozambique A new era for Sasol 17