The State-owned gas companies of South Africa and Mozambique have announced that they have exercised their pre-emptive rights to acquire, for R4.15-billion, the 30% equity stake in the Republic of Mozambique Pipeline (Rompco) hitherto owned by Sasol.
The announcement follows on from Sasol’s May 14 announcement of a sale and purchase agreement (SPA) – subject to the pre-emptive rights held by Central Energy Fund (CEF) subsidiary iGAS and Empresa Nacional de Hidrocarbonetos (ENH) subsidiary Companhia Mocambiçana de Gasoduto (CMG) – with a Reatile-led consortium.
The 865-km Rompco pipeline is a joint venture between Sasol (50%), Companhia CMG (25%) and iGAS (25%) and, once the new SPA is concluded, the holdings of iGas and CMG will increase to a majority 40% apiece, with Sasol maintaining a 20% minority shareholding.
The companies said in a statement that the transaction will be fully funded from past and future dividends generated by Rompco itself.
Sasol, meanwhile, confirmed that it had received pre-emptive rights notices and that it "will now review the notices".
"We believe that the successful partners will add significant value to this important regional energy asset," Sasol said.
CEF Group CEO Dr Ishmael Poolo said the transaction would further iGas’ mandate for the development of gas and gas infrastructure in Southern Africa and would lay a “solid foundation to address the challenges that lie ahead in the security of South Africa’s energy future”.
CEF chairperson Ayanda Noah added that it was a critical step in unlocking the flexibility that gas could bring to South Africa’s energy mix and argued that it could also bolster the region’s transition to a lower-carbon economy.
ENH chairperson and CEO Estevão Pale described the decision to exercise the pre-emptive right as representing a new chapter for Rompco and the enabler for a much wider scope of cooperation between ENH and CEF.
“Having both governments as majority shareholders of the crossborder pipeline is strategic, since the pipeline is the single source of gas to the South African market, and gas is the immediate alternative supplier of cleaner energy,” Pale added.