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Earlier this year, Sasol held a sustainability roundtable. In its presentation, the petrochemicals company outlined a shift away from fossil fuels and towards natural gas in its feedstock. This, it said, is a critical part of its future. However Sasol also admitted that South Africa is fast running out of local natural gas supplies. The refinery sector in the country is said to be in dire straits as PetroSA’s 45,000 barrel-a-day plant is running out of feedstock and Glencore’s Cape Town refinery has been shut since February this year. Combined they would take over a fifth of the nation’s processing capacity offline. Petroliam Nasional, Sasol and Royal Dutch Shell are reviewing their South African operations. In its recent sustainability presentation, Sasol said that it has little choice but to secure natural gas supplies from neighbouring countries. CEO Fleetwood Grobler said that imports from Mozambique were the most likely solution to Sasol’s gas shortage. Now Sasol is selling its stake in the Rompco pipeline which stretches from Mozambique to South Africa. – Melani Nathan
Sasol agrees on Mozambique gas plant sale in latest disposal
By Paul Burkhardt
(Bloomberg) — Sasol has agreed to sell its stake in a 175-megawatt gas-fired power plant in Mozambique to Azura Power for about $145m (R2bn) as part of an accelerated disposal program to pay down debt.
The sale of its 49% shareholding in the Central Termica de Ressano Garcia plant, or CTRG, is subject to conditions including a pre-emption right by state-owned Electricidade de Mocambique, that holds the majority stake, as well as closing adjustments, the company said in a statement. It has yet to announce a winning bidder for its stake in half of the 865-kilometer (538-mile) Rompco natural-gas pipeline that runs from Mozambique to South Africa.
Sasol expects the completion of about $3.5bn (R51bn) in asset sales by the end of the financial year as part of an effort to raise $6 billion (R87.5bn) that may include a rights issue depending on the ongoing success of the disposal process, it said earlier this month. While the fuel and chemical maker’s prized asset put on the block was a joint venture in its US base chemicals business, developers in the region anticipate the Mozambique pipeline sale will open up a route to market for liquefied natural gas.
Rompco currently transports gas from the onshore Pande and Temane fields in Mozambique to Sasol operations in South Africa. After those resources are depleted, it could be filled again from LNG landing at a terminal planned in Maputo.
Total and Gigajoule Group, an energy developer, were among bidders for the pipeline stake in October, according to people familiar with the matter at the time. They’re also partners in the import terminal.
Sasol, in a response to questions, said there will be updates on the pipeline sale “as and when” they occur, and declined to provide any further detail. Azura Power, which agreed to buy the stake in CTRG, owns and develops almost 1,400 megawatts of projects throughout Africa, according to its website.
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