The $300-million brownfield expansion of Sasol’s upstream gas production facilities in Mozambique, from the current yearly rate of 120-million gigajoules to 183-million gigajoules, is progressing on schedule for completion in 2011, Sasol Petroleum International (SPI) MD Ebbie Haan confirms.

A new gas sales agreement (GSA) has been concluded with customers – primarily Sasol itself, which will use more gas at its expanding Secunda synthetic-fuels and chemicals facility – while the Pande gas- field in Mozambique, from where some of the additional feedstock will be sourced, has recently been commissioned.

Pande is the second significant Mozam- bique gasfield to be put into production by SPI, with the initial production having exclusively come from the smaller Temane field. However, from this point onward, the Pande field will supply as much as two-thirds of the expanded gas requirement over the project’s 25-year operational horizon. The Pande/Temane development is governed by a 30-year petroleum production agreement, and is operated by Sasol Petroleum Temane (70%) on behalf of joint venture partners Companhia Mocambicana de Hidrocarbonetos (25%) and the International Finance Corporation (5%).

But Haan, who joined SPI from oil major Shell a little over a year ago, tells Engineering News that further projects to “monetise” what is a billion-barrels- of-oil equivalent (or 5,5-trillion cubic feet) resource base at Pande and Temane are already under consideration.

In fact, he describes Mozambique as SPI’s gas “heartland”, where a portfolio of assets is likely to evolve over time, should its extensive exploration efforts yield posi- tive results and should those be proved economic to develop.

SPI, Haan reports, has been awarded significant additional acreage in Mozambique, both on- and offshore. Exploration is proceeding on the off- shore blocks 16 and 19 in the Inhambane and Sofala provinces, while the area around the Pande and Temane fields is also being explored further. Together with partners ENH and Petronas, Sasol (as operator) recently spent $275-million on a deep-water drilling campaign and it is also pursuing an additional onshore exploration campaign, with two-dimensional seismic acquisition under way and yet more drilling planned for 2010 and beyond.

“We aim to be in Mozambique for the long term, as well as to grow our production and extend the production life of our existing assets,” Haan explains. The aim is also to create an integrated value-chain template in Mozambique that hopefully can be “replicated” in other territories.

SPI is already active in eight countries and is ramping up its upstream activities both as operator and as nonoperator in partnership with others. In Nigeria, Gabon, São Tomé/Príncipe, South Africa, Australia and Uzbekistan, Sasol has a nonoperated position, but it is playing a more hands-on role in explo- ration and development in Mozambique and Papua New Guinea.

“Our strategy is to create access to upstream oil and gas resources for the Sasol group, with particular focus on gas, which we can ‘monetise’ through Sasol’s proprietary gas-to-Liquids (GTL) techno- logy,” Haan outlines, adding that the focus is both fuels and chemicals.

SPI is still relatively modest in size when compared with the large oil majors, but is growing steadily. In 2004, SPI had no production, but that figure currently stands at a 40 000-bl/d equivalent on an equity-entitlement basis, and the expansion in Mozambique will lift that to a 60 000-bl/d equivalent.

“We are keen to further develop with strategic partnerships, as we realise that integrated value chains have high value for all shareholders,” he says.

In 2009, the increase in upstream capacity enabled SPI to grow its operating profit by 11% to R1,1-billion, mainly on higher sales volumes and the weakening of the rand:US dollar exchange rate.

SPI is seeking to grow further, within the overall capital constraints of the bigger group, which has scaled back its expenditure plans to about R12-billion a year for the next two years in light of the recession.

The unit is likely to spend about R2-billion a year on capital in 2010 and 2011 and it is also in the throes of a major recruitment effort, which is aligned to its growth plans. SPI’s permanent headcount is likely to rise from 300 to 400 over the next year, with most of these skills to be located in Johannesburg and London.

Central Procesing Facility Project Update
But any enlarged portfolio in Mozambique and replication of such an integrated approach elsewhere is also strongly depend- ent on the successful implementation, over the next two years, of the $300-million expansion of the central processing facility (CPF) to 183-million gigajoules.

The capital expenditure schedule indi- cates a staged construction roll-out, with some $75-million to be spent this financial year and the $225-million balance to be spent in 2010/11.

Once hooked into the existing 865-km pipeline network, which links the pre- viously “stranded” gasfields to industrial and residential consumers in Mozambique and South Africa, output from the CPF would be stepped up by some 50%.

But, owing to the facility’s remote location, long supply lines complicate matters.

In fact, SPI first had to establish the equi- valent of a new town, together with an expansion of associated bulk and social infrastructure, from roads to canteens, before the project proper could even get started.

“The nearest air strip is at a town called Vilankulos, which is about an hour’s drive away. Therefore, we are having to develop everything from the construction camp itself, through to the water, sanitation and waste-management facilities,” Haan explains. The new construction camp will be able to accommodate more than 400 to 500 people, 300 more than currently occupy the site.

At the heart of the development is the introduction of a ‘third train’ at the CPF. The train will consist of Dew point correction equipment (both water and hydrocarbons) and sophisticated turbine compressors, which will be imported from Germany, at the core of the facility itself.

Much of the equipment and material used in the construction of the processing plant will be preconstructed in modular packages and delivered to the site by means of sea and road transportation.

As with the existing facility, the expan- sion will be operational around the clock and a high degree of automation is, therefore, envisaged, with all supervisory and support staff stationed permanently at the CPF.

The existing pipeline can easily cope with the expanded load, but some booster stations will be added.