The accessibility of Liquefied Petroleum Gas (LPG) in residential areas of Mozambique was the main focus of the speech by the president of Galp Mozambique, Paulo Varela, at the LPG Expo, held in Maputo on the 17th and 18th. Varela emphasized that making LPG available close to inhabited areas remains the main obstacle in the supply of this fuel in the country.

During the event, which addressed investments in infrastructure in Africa, the executive highlighted Galp ‘s active role in the fuel market and its expansive ambitions. “In addition to Mozambique, we are investing in countries such as Namibia, Angola, Guinea-Bissau and Cape Verde. Demand for LPG should grow with supply, with investments focused on regions such as Nampula, increasing proximity to our customers,” said Paulo Varela.

Varela acknowledged the challenges facing the industry, stressing the need for a strategy that combines subsidizing LPG for the most vulnerable segments with a pricing policy that ensures investment recovery.

The president of Galp Moçambique also highlighted the importance of technical issues, such as the control of LPG cylinders and ensuring that each company operates with its own model and valve, increasing safety and encouraging more investment in infrastructure.

“It is essential to expand the LPG reception and storage infrastructure in the Northern Zone to make the product more accessible in regions that are currently underserved. The private sector has been the main driver of these initiatives, although the government’s actions also contribute to facilitating access for the most disadvantaged population,” said Varela.
The head of Galp Moçambique concluded by emphasizing the population growth in Mozambique and Africa as an opportunity for expansion for the LPG sector, but recalled that overcoming the existing challenges is essential to capitalize on this trend.

PetroSA plans to increase gas imports from Mozambique expects the first gas flows from an agreement with Empresa Nacional de Hidrocarbonetos (ENH) to arrive later this year, aiming to bolster supplies ahead of possible shortages, according to Reuters.

With a gas marketing license granted by regulators in March, PetroSA moved quickly to secure an initial deal for 2 petajoules of gas per year (PJ/a), with the possibility of increasing to 200 petajoules eventually. This amount will be enough to supply dozens of industrial gas users, who currently rely mainly on the South African petrochemical company Sasol, which supplies around 190 PJ/a.

Sasol has warned customers that it will significantly restrict supplies within two years, as its gas fields in Mozambique run out.

PetroSA intends to form a joint venture (JV) with ENH to attract potential gas customers in South Africa and replicate the model in Mossel Bay to market the gas from the offshore fields discovered by TotalEnergies, opening a new tab for the Cape Town market.

“In Mossel Bay, we will potentially consider two different JVs, one with TotalEnergies for Brulpadda (field) and another for the Block 9 development, but the main entity that will market gas for the group is PetroSA Gas Trading,” explained Sesakho Magadla, the company’s chief operating officer.

ENH’s gas sales agreement involves importing the product through ROMPCO’s pipeline, which connects the Pande and Temane fields to South Africa, before supplying users through Sasol’s pipeline network in the north of the country.

PetroSA is currently negotiating two gas transportation agreements with Sasol and ROMPCO, a gas pipeline company, which run from Mozambique to Sasol’s petrochemical complex in Secunda, South Africa, where it operates the world’s largest coal-to-liquids plant.

Oil prices are falling as investors wait to see if Israel will retaliate to Iran’s attack. West Texas Intermediate (WTI), traded in New York, fell 0.52% to 84.91 dollars a barrel, while North Sea Brent, the benchmark for European imports, fell 0.4% to 89.66 dollars a barrel.

Israel has said that it will respond to Tehran’s attack, despite calls from the West and Middle Eastern countries for restraint, but has not released any details about the type of retaliation that might be involved.

“Tensions are expected to remain contained, avoiding a wider conflict that could cause shortfalls in oil supplies,” said Han Zhong Liang, an analyst at Standard Chartered, speaking to Bloomberg.

Regasified Liquefied Natural Gas (LNG-R) transported through the Mozambique-Secunda Pipeline (MSP) by ROMPCO (Republic of Mozambique Pipeline Investments Company) is a viable alternative for South African industrial clients, said Motlokwe Sebake, the company’s head of corporate and commercial affairs.

According to the news portal Engineering News, LNG is natural gas that has been cooled to a liquid state to make it easier to transport and store. It can be regasified at the point of use and burned as a fuel for electricity generation, heating or industrial processes. LNG-R has several advantages over pipeline gas, including reduced emissions, greater flexibility and lower infrastructure costs.

ROMPCO, a joint venture between the governments of South Africa and Mozambique and Sasol, operates an 865-kilometer pipeline that transports natural gas from the Pande and Temane fields in Mozambique to markets in both countries.

Motlokwe Sebake explained that the pipeline supplies around 90% of South Africa’s gas demand, mainly for industrial use. However, the supply of gas from Pande and Temane is expected to decrease in the coming years due to the depletion of the fields.

To meet this challenge, ROMPCO is considering connecting LNG from the Matola terminal in Mozambique to the ROMPCO pipeline. The Matola terminal, which is being developed by Beluluane Gas Company (BGC) and TotalEnergies, will have a floating storage and regasification unit (FSRU) with a capacity of two million tons per annum (MTPA) of LNG.
“The connection of Matola’s LNG supply to the ROMPCO pipeline will increase the security of South Africa’s energy supply and ensure that the MSP is used to its maximum capacity, given the decline of the Pande and Temane fields,” commented Motlokwe Sebake.
ROMPCO’s LNG-R is an attractive option for South African industrial customers and can complement South Africa’s efforts to make the transition to a low-carbon economy and increase its energy security.