Minister Tonela negotiates Mpanda-Nkuwa and Palma-Gauteng pipeline with South African counterpart – A Verdade

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Minister Tonela negotiates Mpanda-Nkuwa and Palma-Gauteng pipeline with South African counterpart – A Verdade

12:36 CAT | 28 Feb 2020

Mozambique’s Minister of Mineral Resources and Energy, Ernesto Max Elias Tonela, has met his South African counterpart, Gwede Mantashe, to discuss regional energy projects including the Mpanda Nkuwa dam and the Palma-Gauteng gas pipeline, @Verdade has established.

The unannounced meeting involving the heads of the energy sectors in Mozambique and South Africa took place in a Maputo hotel, without any subsequent statement to the press.

“We approached regional energy projects of mutual benefit, we did not discuss projects in particular,” national energy director Pascoal Bacela told @Verdade.

While Mozambique tries to get a second dam on the Zambezi River off the ground and further monetise the natural gas it will be entitled to when the liquefaction projects in the Rovuma Basin start production, its neighbour faces a severe energy crisis, with electricity rationing intermittently in force.

The Mpanda Nkuwa dam would represent a large, safe and clean source of energy for South Africa, the main buyer of the energy produced by Cahora Bassa Hydroelectric, and Mozambique needs purchase contracts to obtain the necessary bank financing. The domestic market is too small to support a venture budgeted at US$2.3 billion.

On the other hand, Mozambique will have at least 950 million cubic feet of natural gas from the Rovuma Basin available, and the national market is insignificant and unlikely to grow enough to make the LNG business profitable.

Just as it has been the main destination for the natural gas extracted in Inhambane province, South Africa’s interest in Cabo Delgado gas is a matter of public record, and Sasol believes in the viability of a 2,600 kilometre gas pipeline between Palma and Gauteng province in South Africa, budgeted at US$6 billion.

One of Minister Tonela’s main missions during the current five-year mandate is to create the foundations for Mozambique to become a mainstay of regional power supply. The Mpanda Nkuwa dam and the Palma-Gauteng gas pipeline have the potential to make that dream a reality.