French oil company TotalEnergies plans to approve the construction of a liquefied natural gas (LNG) import terminal in Mozambique in 2025, which could help South Africa avoid a possible energy supply crisis, according to BNN Bloomberg.
According to the information, the project, developed in partnership with South Africa’s Gigajoule, could start loading gas by the end of 2027. This date coincides with the period in which the Sasol Ltd. fields in Mozambique are expected to run out, which would affect South African companies such as brewer Anheuser-Busch InBev SA/NV and steelmaker ArcelorMittal, raising fears of a supply crisis, known as the ‘gas cliff’, in Africa’s largest industrialised economy.
The Matola terminal, located in the country’s capital, Maputo, will have a production capacity of 2.5 million tonnes of LNG per year, as announced by TotalEnergies. This project is intended to supply gas to South Africa, and is distinct from the export plan that the company is developing in the province of Cabo Delgado, in northern Mozambique.
The Industrial Gas Users Association of Southern Africa (IGUA) is in the process of finalising purchase contracts for the project, which are expected to be signed by December. Jaco Human, CEO of IGUA, emphasises that the group is facing a race against time to build the new infrastructure, considering the risk of not guaranteeing the gas supply to be ‘catastrophic’.
‘This project is intended to supply gas to South Africa, and is distinct from the export plan that the company is developing in Cabo Delgado province, in northern Mozambique’
The interest in alternative sources of gas comes in a context in which South Africa wants to increase its consumption of this fuel, while reducing its dependence on coal. However, companies already using gas are facing difficulties due to possible delays in building the necessary infrastructure.
The final investment decision is expected to be made in the second quarter of 2025, according to Gigajoule CEO Jurie Swart. The terminal will be connected to the existing pipeline that transports Sasol gas from Mozambique to South Africa. Gigajoule estimates that the project will cost 200 billion meticals (3.2 billion dollars), including a gas-fired power plant.
TotalEnergies said it is working with ‘all interested parties’, such as Sasol and South African state energy company Eskom Holdings SOC Ltd. Meetings on the status of contracts and gas prices were held on 4 October, also involving financial institutions, according to Jaco Human.
Despite the compromises obtained by the IGUA, Human warned that time is running out to avoid a gas shortage, concluding: ‘There is no other option.’