Gigajoule and Total sign Joint Development Agreement for the importation of LNG and power generation.
Liquified Natural Gas (LNG) will soon be delivered to a permanently moored Floating Storage and Regasification Unit (FSRU), in the Matola harbour. This facility will be connected to a gas-fired power plant in the Beluluane Industrial Park and, via the Matola Gas Company (MGC) infrastructure, to the South African gas network. The availability of a new source of much needed natural gas and power will fuel the economic growth in Mozambique and the Southern African region.
The Mozambican economy is demanding more gas to grow, especially from industry and power generation sectors. MGC has started studies and consultations with Government for the importation of LNG back in 2012 to secure additional gas. Gigajoule, a major shareholder in MGC, had been studying and investigating the possibility of LNG delivered in the Matola harbour. These studies indicated that the Matola harbour adjacent to Maputo has calm metocean conditions, is relatively uncongested and can easily be connected to the regional gas and power markets via the established MGC gas pipeline network.
In 2017, Gigajoule, Total and MGC signed an MOU to move forward with the development of this LNG to industry and power project. Engineering design, environmental and social impact studies, stakeholder and market engagements for power and gas offtake were conducted and presented to Government as a feasible opportunity.
On 23 July 2019, the Mozambique Council of Ministers awarded two concessions for this LNG importation venture. Beluluane Gas Company (BGC) was awarded the first concession for the development, construction and operations of all the gas infrastructure needed for the importation and storage of LNG as well as the transport of the gas to the power plant and to the existing MGC pipeline network for further distribution.
The second concession was awarded to Central Térmica de Beluluane (CTB), for the design, construction and operations of a gas-fired power generation station of up to 2 000MW capacity in the Beluluane Industrial Park in Matola. The Beluluane Industrial Park is adjacent to the Maputo substation and Motraco power lines which form part of the Southern Africa Transmission Grid.
The Joint Development Agreement (JDA), signed on 27 November in Maputo, will accelerate the process which will enable a Final Investment Decision (FID) to be taken by the middle of 2020. Construction shall then proceed and commercial operations commence by the end of 2022.
The gas pipeline network, harbour infrastructure and the connection to the South African gas pipeline network via the MGC gas infrastructure (BGC), will cost around USD 350 million.The total cost of the 2 000MW power plant (CTB) that will be constructed in phases as the market demand develops, is around USD 2.8 billion.
LNG will be procured from Total’s international LNG portfolio. As the second largest private global LNG player, Total, with its solid positions across the LNG value chain, is the ideal partner for this world-class project.
BACKGROUND
Gigajoule
Gigajoule is a promoter, developer, investor and operator of natural gas infrastructure in Southern Africa. Gigajoule was formed in 2002 and is a major shareholder of two Mozambican Energy companies, Matola Gas Company and Gigawatt Mozambique.
After the successful development of MGC, Gigajoule, with its focus on the Southern African energy market, realised that the South African gas market has a huge potential in terms of growth and opportunities. While renewable energy generation is making a positive impact on the power supply as a whole, flexibility of supply is required to balance the system as renewable power generation is unpredictable. Gas-fired power plants, with the lowest environmental impact of the fossil fuel fired power plants, are the most economical ways to complement renewable technologies to ensure supply continuity, as a result of its inherent ability to supply flexible and intermittent power. From this vision, Gigajoule developed its first gas fired power plant in Mozambique under its subsidiary, Gigawatt Mozambique.
Total
Total is a major energy player, which produces and markets fuels, natural gas and low-carbon electricity. Total’s 100,000 employees are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries, Total’s ambition is to become the responsible energy major.
Matola Gas Company (MGC)
In 2005, MGC completed the construction of a 100km gas pipeline network in Maputo province, Mozambique. MGC has owned and operated this gas network since 2005. Currently, MGC is the second-largest gas distributor in Southern Africa having converted over thirty industries to natural gas, supplies two gas-fired powerplants, and supplies natural gas to vehicle filling stations in Mozambique. In 2009, MGC introduced the first virtual pipeline system into Southern Africa, where compressed natural gas (CNG) is used to supply industries that cannot be economically connected to the pipeline network.
Gigawatt Mozambique
In 2010, the Mozambican government awarded Gigawatt Mozambique a 25-year concession for the construction and operation of a gas-fired power generation facility up to 350MW. Operations commenced in 2012 with a temporary powerplant to supply 240MW to various utilities in Southern Africa from the Gigawatt park in Ressano Garcia. This allowed Gigawatt Mozambique to develop and construct a permanent 120MW gas-fired power plant next to the temporary power plants.
This was the first privately-owned gas-to-power Independent Power Producer (IPP) in Southern Africa. The permanent plant was built within budget and on time, and operations started on 15 December 2015 and met all design criteria.
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