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Construction of gas pipeline linking South Africa and Mozambique gains hope

Plans are underway to construct a major gas pipeline linking Mozambique and South Africa dabbed African Renaissance gas pipeline.

Investments will come from Mozambique and South Africa. It is estimated that constructing the pipeline will cost US $6bn.

A cooperation agreement on the gas pipeline project has been signed between ENH, Profin Consulting, SacOil and China Petroleum Pipeline Bureau. The 2,600 kilometre gas pipeline from the Rovuma Basin in northern Mozambique to Gauteng province in South Africa is expected to deliver gas to towns in Mozambique along the pipeline’s route.

SacOil’s chief executive officer, Thabo Kgogo said the agreement confirms the financing commitments required for the pre-investment and engineering studies phases of the project, and paves the way for its speedy and effective construction and implementation.

He added that the first task of the consortium is to start with a feasibility study. If the project turns out to have economic benefits it will then be taken further from a financing point of view.

The chief executive expressed optimism that the construction of the pipeline will help trigger economic growth not only in the SADC region but also Africa a continent.

“The project will be dealing with solving the energy crisis and if there is an over-supply of energy, industries can grow and stimulate economic growth.” he said.

China Petroleum Pipeline (CPP) was preferred because it built a similar pipeline in Tanzania and the fact that it has been in business for more than 40 years as well as having experience in raising funds among banks.

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