Parters in Mozambique for exploring a GTL plant

Sasol were in the news yesterday, via their website: ENH and Eni announce pre-feasibility study for large-scale gas-to-liquids facility in Mozambique. Eni Spa are an Italian based multinational oil and gas business with a market capitalisation of 73.87 billion Euros, or 1.079 trillion Rand. That is how huge Eni are, they are as close to a major by global standards as you can get.


Who are ENH? Empresa Nacional de Hidrocarbonetos (ENH) are a Mozambican government owned oil company. You all know who Sasol are, right? Next question, where is the Rovuma Basin? Well, as far north as you can get in Mozambique, the basin overlaps with Tanzania. According to the release, Eni estimates that the specific block in question, a block called area 4. I found a story from last year, which suggested that Eni had sold a 20 percent stake in that block to CNPC for 4.21 billion Dollars.


Anadarko Petroleum, the US oil and gas business are also involved there, in the Rovuma basin, you can view a EIA report done by both Eni and the aforementioned Anadarko. How much does the block hold? Well, according to Eni, 85 trillion cubic feet of natural gas.


To put it into perspective, according to a liquefied natural gas (LNG) report from the EIA on Qatar, Russia exports around 7.4 trillion cubic feet of gas per annum. Or at least they did in 2012. So 85 trillion cubic feet of gas is a lot. Rovuma Basin? How far north?





As you can see, the Rovuma Basin is further north than the northern most tip of Madagascar. So even if Sasol decide to build a smaller gas to liquids plant up there, who would their customers be? Locally we have millions of customers on their oldest operations which are on their door step. This is Quitupo. This is Cabo Delgado province, with a total population of 1.65 million people.

Next door however, in Tanzania there are 45 million people living there. The penny dropped that the fuels from a smaller plant could be hugely beneficial for all the agricultural development that is likely to take place in the region in the coming years, diesel specifically for larger agricultural vehicles.


I am thinking that Sasol are also going to get more into regional energy supply, having successfully supplied the Mozambican government already with a gas electricity turbine. Good news for everyone and a sign that the rest of the continent still offers many opportunities. Remember however, this is just a pre-feasibility study, many have been done before which have not progressed further. That is the nature of the beast.