Mozambique to build $85 mln domestic gas pipeline

Gas pipeline to link Matola and capital Maputo

September 30, 2009

Mozambique's state-run oil and gas company Empresa Nacional de Hidrocarbonatos (ENH) said on Wednesday it plans to build an $85 million (R642 million) gas pipeline to boost local supplies.

ENH chief executive Nelson Ocuane said the pipeline would link the industrial city of Matola and the capital city Maputo and that an international tender to select a company to supply engineering advice and procurement had been launched.

"The construction of the pipeline will cost $20 million and the distribution operation will cost some $65 million," Ocuane told Reuters.

Mozambique has major proven gas reserves, but does not have the technical and financial capacity to exploit them.

Sasol, South Africa's petrochemical group, has invested $1.2 billion to develop an extensive pipeline network from Mozambique's Pande and Temane gas fields to South Africa.

Gas was discovered in Mozambique in 1962, when Gulf Oil drilled a successful well in the Pande field in the southern province of Inhambane, but 17 years of crippling war which ended in 1992 had prevented further investment.