Sasol Targets Mozambique for Power Project, Clean Gas Supplies

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Sasol Limited (NYSE:SSL) (Johannesburg, South Africa), the synthetic fuels and petrochemicals group, is planning a 140-megawatt (MW) gas-to-power plant in Mozambique. Henri Loubser, head of Sasol's new energy unit, said that EDM is expected to take a 51% interest in the project and that the power output will be supplied mainly to Mozambique.

The investment decision on the $225 million project will be made in the first half of 2012, and no problems are anticipated in raising funds for the project in power-hungry southern Africa. Sasol is developing a power project with a similar profile and gas feed in Sasolburg, South Africa. For more information, see October 28, 2011, article - Foster Wheeler Bags Another Contract.

The company plans to generate 60% of the power required for operations by 2013 to beat rising power prices and maintain a secure power supply, independent of the national utility Eskom's power grid supply problems.

In the company's 12th annual sustainable energy report, Mozambique is identified as an important country for project developments. As Sasol works on a program to reduce its carbon footprint in southern Africa, it is exploring for feedstocks, other than coal, such as methane gas in Botswana and natural gas in Mozambique.

Currently, it sources gas from the onshore Pande/Temane field in Mozambique and is planning to drill an exploration well in the offshore M10 offshore block in the third quarter of 2012, following recent discoveries by Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas) and ENI S.p.A.(NYSE:E) (Rome, Italy).

Sasol is one of South Africa's top emitters, with 60 million tons of CO2 annually. The company grew its fuel from coal production technology, but has been diversifying into chemicals, gas and clean energy projects. It has set a target to reduce its emissions intensity by 15% across operations by 2020, from a 2005 baseline.

It also plans to improve the efficiency of its coal-to-liquid plants by reducing emissions from those built before 2020 by 20%, and those built before 2030 by 30%.

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