SADC Industrialisation Week Lessons Learned from Mozambique South African Pipeline 1 August 2017
Sasol at a glance Pioneer in the inventive monetisation of hydrocarbons An international integrated chemicals and energy company One of the world s largest producers of synthetic fuels South Africa s leading energy and chemicals company, expanding internationally Pioneer in gas-to-liquids (GTL), coal-to-liquids (CTL) and related technologies with over 60 years experience Over 50 years experience in the production and marketing of a range of chemicals Partner with various organisations to develop, pilot and implement new technologies Strong intellectual property portfolio with 2 023 patents held worldwide 2
THE GAS FROM MOZAMBIQUE PROJECT HOLDS MANY KEY LEARNINGS
The Sasol Mozambique experience Regional partnership in action completed June 2004 Beira Temane / Pande 865 km Pipeline Nelspruit Komatipoort Sasolburg Secunda Maputo 4
The successful development of the gas industry in South Africa were achieved through collaboration Secure anchor customers to provide base load Multilateral involvement and collaboration underscored by partnerships A Gas Master Plan Enabling and supportive regulatory and fiscal environment that is regionally focused Partnerships are key 5
Natural gas fields Gas from Mozambique was facilitated by Sasol being an anchor offtaker Mozambique South Africa PPA Pande Royalty gas to ENH: Vilanculos ENH Maputo reticulation Royalty gas Adapt illustration from Nompilo s Sasol Secunda slides Central Processing Facility (CPF) Ressano Garcia Rompco Pipeline Sasol Sasol Sasolburg Temane Central Térmica Ressano Garcia 175 MW Third parties 3 rd parties 354 customers 4 resellers Initial consumption was mainly in South Africa - over the years consumption has increased in Mozambique with Ressano Garcia developing into a gas-to-power electricity generation hub 6
Today The Mozambican, South African governments and Sasol have invested at least R24bn in the pipeline to date Ongoing: Exploration in Southern Africa (R3B in 2009-11) 2013: New 155km Gauteng Network Pipeline (R1.6B) 2017: New 128km loop line in Mozambique (R2.7B) 2005 2007 2009 2011 2013 2017 2004 2006 2008 2010 2012 2014 Time 2004: Initial investment (R12B) 2010: New compressor station at Komatipoort (R1B) 2012: Expansion of the CPF 1 in Temane to 183 mgj (R1.8B) 2014: New 128km loop line in Mozambique (R2B) 7
Sasol established a gas business through partnering with the Mozambican and South African governments Supply in excess of 180PJ of natural gas and methane rich gas Our key markets are the chemical, manufacturing and metal industries. We also supply gas to wholesalers ROMPCO pipeline from Mozambique was expanded through a second Loop Line to a capacity of 212PJ costing R2,7 million. Sasol Gas owns and operates 1428Km of gas pipeline in South Africa and 865Km through ROMPCO 66% of the gas is used internally and sold to joint ventures 28% is sold to the commercial market 6% is sold on a wholesale basis to resellers Sasol and its partners have invested at least R24bn in the Southern African gas industry up to 2017 Sasol continues to invest in exploration in Southern Africa to enable the continuation and growth of the industry 8
MGJ/a The gas industry has tripled in growth since introduction of natural gas From manufacturing to power generation, a wide group of gas users 200 180 160 ~200% increase In volume 148 153 161 172 179 140 120 100 80 83 104 62 111 65 120 121 70 73 124 73 97 101 111 121 128 60 46 43 40 7 20 39 40 42 46 50 47 50 51 52 49 51 51 - FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 Commercial Wholesale 9
Key Success Factors Successful negotiation of agreements Effective involvement of government entities Supportive legislative environment Stakeholder involvement Acknowledgement of key environmental issues Integrated project management structure Corporate Social Investment Servitudes and land issues Local content 10
What made the Project possible ENH and Sasol partners in developing the Pande and Temane gas fields Anchor load provided by Sasol Bi-lateral trade agreement South Africa and Mozambique Attractive investment environment Effective involvement of government entities Regulatory dispensation in South Africa Balanced distribution of benefits 11
What worked well for the Project Mozambique Country Manager appointed early Ministerial Steering Committee (Mozambique) Multi level interfaces with government, NGO s Project Liaison Committee Co-ordinates government department activities Joint project task teams Structured interfacing at three levels Ministerial Governmental National Provincial District Community Social development benefits to communities Cross border commission 12
Collaboration can anchor further gas infrastructure investments in the region Secure anchor customers to provide base load There are sufficient gas resources in the region Focus on developing our resources through regional collaboration and acknowledging the interdependence A Gas Master Plan Regional energy charter crystalising benefits for all participants Inter-departmental task team with business and civil society Develop a clear roadmap of how the region could further develop regional gas infrastructure Enabling and supportive regulatory and fiscal environment that is regionally focused Policy must be aligned, contextualised, clear, coherent and reasonable creating investment opportunities Multilateral involvement and collaboration underscored by partnerships Partnerships across the industry and the region must be considered Partnerships in this industry is key 13
Thank You johan.thyse@sasol.com