Mozambique not the answer to SA’s power woes

At first glance, building a pipeline from Mozambique to South Africa seems logical; South Africa is suffering a major electricity crisis and gas supply shortage while its northern neighbour is sitting on the world’s largest gas finds in 20 years.

In addition, Mozambique’s new petroleum law – passed in August last year – offers the potential for large volumes of gas to be available only for regional exports. The law specifies that 25% of all gas must be earmarked for the domestic market – a surprisingly large quota for a country with a market as small as Mozambique’s. This has led some at South African utility Eskom to ask whether Mozambique’s state petroleum regulator INP may be open to accepting regional markets within its definition of domestic supply.