PoliticsNews & AnalysisSasol's combustive investment in Southern Africa


Posted on Tuesday, 03 January 2012 18:36

Sasol's combustive investment in Southern Africa

By Gregory Mthembu-Salter in Cape Town

The South African company is building partnerships for gas exploration across the globe to meet demand for power

The company is actively exploring for more off the coast of Mozambique and South Africa’s KwaZulu-Natal Province/Photo/PATRICK DUMAS /LOOK AT SCIENCESSouth Africa's Sasol announced in November that it would soon begin joint exploration for coal seam gas (CSG) in Botswana with Australia's Origin Energy.

The 50:50 venture, to be called Kubu Energy Resources, has three exploration licences covering 3,000km² and will drill five wells over the next two years. Ebbie Haan, managing director of Sasol Petroleum International, told the 18th Africa Oil Week conference in Cape Town that the Botswanan venture fit with the company's increasing focus on low- or no-carbon electricity.

A high international oil price, combined with a much lower gas price, has "created a window" for Sasol's coal-to-liquids business, said Haan, making it important to acquire further shale gas reserves.

In June, the company acquired 50 percent of the Farrell Creek and Cypress A shale gas blocks in Canada, which it has described as "one of the most prolific shale plays in North America". Closer to home, Haan told The Africa Report he was "very surprised" at the outcry within South Africa at proposals to drill for shale gas in the Karoo desert.

Haan said South Africa's current reliance on coal was far more environmentally destructive and that it was insulting to think Sasol would extract gas from Karoo without proper controls in place, asking: "Who do people think we are? Monsters?"

The gas industry in the Southern African region has received a massive boost from the announcement that Italian oil giant ENI found an estimated 22trn ft³ of natural gas in the Mamba South fields off Mozambique in late October. A consortium led by US company Anadarko also announced a find of at least 10trn ft³ of natural gas in the deepwater Rovuma Basin in early October.

The gas fields should come onstream by about 2014, boosting power generation and fertiliser production, and giving a sizeable boost to the Mozambican government's coffers.

Elsewhere in Mozambique, the Pande, Temane and Inhassoro Complex, in which Sasol has a 70 percent share, currently produces 300m ft³ of gas per day. The company is actively exploring for more off the coast of Mozambique and South Africa's KwaZulu-Natal Province.

It is also busy working on a new R1.8bn ($227m) gas-fuelled power project at its headquarters in Sasolburg, South Africa, that will generate 140MW and is due to become operational in 2013.

Last Updated on Tuesday, 03 January 2012 18:53

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