Mozambique Advances Temane Power Project
Globeleq, the lead partner in Mozambique's Temane Energy Consortium (TEC), has signed a joint development agreement with state-owned Electricidade de Mocambique (EDM), a boost to a plan to the building of a much-delayed 400 MW gas-fired power project south of the country.
Signed June 21 during the 2018 Africa Energy Forum in Mauritius, the agreement entails TEC taking up a 60% stake in EDM's shareholding in a Mozambican special purpose vehicle company, with EDM holding the remainder.
Globeleq's CEO Paul Hanrahan said: "The Temane project will provide Mozambique with significant base load power to help drive economic growth. As Globeleq enters the Mozambique market, we look forward to partnering with EDM in this exciting venture." The Temane power project has been developed by EDM and South African producer Sasol, with EDM holding 51% and Sasol 49% in the project. In addition to building the power plant to tap into onshore Temane gas field, the project will involve TEC supporting EDM in the construction of associated electricity transmission infrastructure.
Globeleq now operates solely in Africa, having divested assets elsewhere years ago; the London-based company is owned by UK state-owned developer CDC (70%) and Norwegian counterpart Norfund (30%),
The Temane gas field was discovered by Gulf Oil in 1967 and it, together with neighbouring Pande acreage - discovered by the same company in 1961, hold an estimated 2.5 trillion ft3 of proven reserves. Temane was brought into production in 2004, while Pande was started up in 2009; both fields are operated by Sasol.
In total, the country has around 180 trillion ft3 of proven reserves, but most are offshore to the north where majors such as Exxon, Eni and Anadarko are advanced in projects to develop their fields, mainly via LNG exports to Europe and Asia starting from 2022 onwards. Much of the Pande/Temane gas, onshore southern Mozambique, is transported to Secunda in neighbouring South Africa along a 865km pipe.
Globeleq said the project will supply low cost, reliable power to EDM through a 25-year tolling agreement using natural gas supplied from the Pande-Temane fields operated by Sasol, with ENH, the state-owned producer, as its partner.
EDM selected TEC in December 2017 as part of a competitive bidding process. EDM chose the consortium due to its experience developing and operating gas-fired power projects; competitive cost of capital; and ability to deliver the most competitive tariff. With the signing of this agreement, the Globeleq-led consortium will officially join EDM in developing the project and bring it to financial close.
EDM's chairman Mateus Magala said: "EDM welcomes its long-term bankable partnership with the Globeleq consortium. Their commitment and experience in the power sector will help EDM in achieving its goal in providing universal access by 2030 through affordable power to the people of Mozambique."