South African energy group Sasol has started drilling the first of what will be 12 new gas and oil wells in Mozambique –with first production expected in mid-2019–, where the government recently approved a production sharing agreement (PSA), as well as a field development plan for the resources, Engineering News reported. The company said that Mozambique’s debt crisis and lower oil prices will not affect its $1.4b gas project, and costs will be covered and recouped through gas revenues, Reuters reported.
Sasol’s project, which lies about 600 km north Maputo, will be rolled out in stages. The first phase will include an oil, liquefied petroleum gas and gas project adjacent to its Pande and Temane fields. Natural gas from these two fields is currently being transported through a 865 km pipeline to gas markets in Mozambique and South Africa.
Most of the gas will go to a 400MW power plant in Maputo with the rest destined for third-party customers. The company began producing gas in Mozambique in 2004, supplying mainly its two South African power plants.