Energy and chemicals group Sasol expects to make a final investment and funding decision during the second half of 2012 for a 140 MW gas engine power project to be developed in Ressano Garcia, a Mozambique town located close to the South African border.

In a letter to shareholders, CFO Christine Ramon indicated that the development was being pursued by Sasol New Energy, in partnership with State-owned power utility Electricidade de Moçambique (EDM).

Sasol was likely to take a 49% shareholding in the power plant, which was expected to start operating during 2014.

In June, Aggreko, of the UK, and black economic-empowerment company Shanduka unveiled plans for a 107 MW temporary gas-fired power plant, in Mozambique, which would be fuelled by gas from Sasol's Temane gasfield.

The electricity, which should begin flowing later this year, would be purchased by South African power utility Eskom (92 MW) and its Mozambican counterpart, EDM, which had signed an agreement for 15 MW.

The plant was being developed at a site near Ressano Garcia, which is said to be located near to the existing Sasol gas pipeline, running from northern Mozambique to South Africa, as well as a 275 kV transmission corridor.

Aggreko indicated it would build gas interconnections, a substation, and a 1.5 km 275 kV transmission line to the main network and the infrastructure would remain intact after the ‘bridging’ installation was dismantled.

Aggreko and Shanduka indicated that Sasol planned to reallocate the gas to “other ventures” after July 2014.

The Sasol-EDM project was likely to be similar to the 140 MW power plant being built at a cost of R1.8-billion at the group’s Sasolburg complex, in South Africa’s Free State province.

The South African facility would also be fuelled by natural gas from Mozambique and the output would replace coal-fired power generation, enabling Sasol to reduce its carbon dioxide emissions from Sasolburg by a further one-million tons a year.

The first gas engines arrived at the Sasolburg complex in May 2012 and Ramon said commissioning was expected during the fourth quarter of 2012.

Sasol recently concluded an agreement with the local unit of Wärtsilä, of Finland, to operate and maintain the plant for three years.

“As a result of this and other projects, Sasol is on track to produce approximately 60% of its electricity requirements by 2013,” Ramon reported.

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