South Africa’s State-owned Gas Development Company, iGas and Mozambique’s Companhia Mocambicana de Gasoduto (CMG), have exercised their pre-emptive rights to acquire 30% of Sasol’s stake in the pipeline, owned by the Republic of Mozambique Pipeline Company (ROMPCO), which is valued at $290 million.
The move comes after a deal signed in May 2021 which saw Sasol agree to sell a 30% stake – retaining 20% shares – in the 865km pipeline to a Reatile-led consortium for $353 million.
South Africa’s Central Energy Fund (CEF) and Mozambique’s Empresa Nacional de Hidrocarbonates (ENH) said in a joint statement that the transaction will be funded from past and future dividends generated by the gas pipeline.
Chair of the Central Energy Fund managing iGas, Ayanda Noah said that cooperation between the two countries concerning energy will be an important step towards bolstering the region’s transition to a low-carbon economy, as South Africa still depends on coal to generate most of its electricity. Plans for the future of energy in South Africa include the procurement of power from renewable technology and natural gas sources.
“Having both governments as majority stakeholders of the cross-border pipeline is strategic, since the pipeline is the single source of gas to the South African market,” ENH Chief Executive Estevão Pale said. https://www.marketscreener.com/quote/stock/SASOL-LIMITED-1413409/news/Sasol-nbsp-S-Africa-Mozambique-state-energy-firms-to-increase-shareholding-in-gas-pipeline-35713014/
CEF Group CEO, Dr. Ishmael Poolo, said: “There was a concerted effort to fast track the acquisition of these shares, which is a hallmark of the group’s investment strategy in the energy value chain geared to reignite the South African economy and create much needed jobs. It also furthers the mandate held by iGas for the development of oil and gas infrastructure in Southern Africa.” https://www.hydrocarbons-technology.com/news/igas-cmg-stakes-rompco-pipeline/
The sale is aimed to assist Sasol’s ongoing debt reduction effort, with the group having indicated that it intends to raise $400-500 million through asset sales by the end of the year.